Xafinity has launched a low-cost pension product called the Xafinity Pensions Trust (XPT) in response to the volatile performance of equity markets and pension scheme members' fears about their retirement income.
The pension scheme combines the governance attractions of a trust-based pension with the low-costs normally associated with contract-based defined contribution (DC) schemes. XPT is a multi-employer trust-based arrangement, with one set of trustees and administrators overseeing all participating employers’ pension benefits.
Each employer’s slice of the XPT ‘master trust’ is ring-fenced, allowing them to offer their own employer pension trust, which can be branded as such. This master trust scheme enables administration and governance costs to be spread widely, minimising charges and freeing more funds for investment.
The Annual Management Charge (AMC) deducted from members’ funds generally covers all ongoing administration, communication, levy, governance and investment costs, unless an employer wishes to meet some of these costs directly. A typical AMC will be just 0.8% of each member’s fund.
XPT also provides comprehensive investment support to members to help them select which strategy is appropriate for them personally.
As well as a whole range of self-select funds, XPT has carefully structured four widely diversified lifestyle portfolios for those members who want to have an easy choice. These aim to enable members to achieve their desired investment returns but in a much less risky and more predictable manner.