Defined Contribution
Supporting schemes and members to achieve good outcomes
DC solutions
Helping to make pension planning simpler
We’ll support your scheme all the way from setting it up, to providing ongoing investment expertise, tools and communications that help your members to and through retirement
Our vision for DC
At L&G, our aim is to help you navigate the changing world of UK pensions and savings as painlessly as possible.
Whatever the size of your scheme or the challenges you face along the way, we’re here to support you and your members with our established expertise in successfully delivering defined contribution pensions.
Administration
Running a DC pension scheme can be challenging. Fortunately for our clients, we offer a range of products and services that provide specialist support with the necessary operational, administrative and governance functions.
This means that entrusting us to administer your scheme not only gives you pensions management expertise from our professional teams but allows you to focus all your energies on your core business. Meanwhile, we’ll focus on our core business – keeping your pension scheme running smoothly on your behalf.
Communications
Pensions aren’t everyone’s idea of excitement but not thinking ahead can leave people exposed to challenging financial realities later. We believe providers like us have a duty to interest people in their retirement arrangements to support them with laying foundations for better futures.
We work with our clients on providing bespoke messaging that resonates with their members and supports informed decision-making.
We offer clear, timely communications across a range of media, including videos, apps and online planning tools. These help scheme members engage with their pensions, understand their choices, picture what the options might look like for their own lives, and check whether they’re on track to achieve their retirement goals.
We also offer clear information on wider savings platforms such as ISAs.
We understand that good communication works both ways and so we stage online events and forums as well as using engagement tools to give clients and members a say on issues that matter to them.
For example, we know that many of our clients and members care about the environment, the way people are treated, and the way organisations are run (environment, social and governance matters or ESG for short). To gauge their views on the ESG impact of businesses in which we invest their retirement savings – and whether they’d prefer to avoid or keep investing in these companies – we use technology that allows clients and members to share with us how they’d vote. You can read more about our ESG work on our Responsible investing pages. We also have a member-facing ESG site.
Meanwhile, to help consultants and trustees make more enlightened investment decisions, we publish a range of thought-leadership material focusing on DC pension solutions, market events and trends.
Investment excellence
We believe investments are a key driver of long-term DC outcomes, and as the largest UK DC pension scheme manager, we offer a wide range of award-winning DC investment strategies that aim to meet the different needs of our clients.
This includes offering funds that reflect concerns about the impact that companies in which we invest have on both the environment and wider society.
Investment only platform
LGIM’s Investment Only Platform (IOP) combines the entire implementation tool kit of an experienced fund management team within one of the UK’s largest asset managers.
The platform puts our clients in control through consolidating assets in one place, complemented by efficient investment implementation.
The platform can offer a range of key benefits and solutions for DC clients. These include:
- Full range of transition services
- Project-managed implementation
- White labelling and blending as standard, including complex structures or illiquid components
- Smart Cashflow
- Bespoke factsheets
Key benefits for clients
- Simplicity - single contract for all assets
- Breadth - fully open architecture
- Cost-efficiency - using our scale to reduce costs
- Transparency - online access to data
- Stability - supported by a trusted brand
Workplace pensions
As one of the leading providers of workplace defined contribution pensions, Legal & General offers a range of trust and contract-based schemes that offer flexibility, choice and value for money.
Our workplace pension – an overview
- Simple, efficient way to enrol members and pay contributions
- Charges tailored to suit your circumstances
- Access to a broad and evolving range of investment funds
- Option to self-select funds
- Default investment choice for auto-enrolment including funds that reflect concerns about environmental, social and governance issues
- An option to choose a salary sacrifice arrangement
- Flexibility to have more tailored solutions
- Ability to transfer shares from employer-sponsored share savings schemes
- A range of online resources including tools to help members manage their workplace pension plus further support at retirement
Legal & General WorkSave Mastertrust
At Legal & General, we understand that employers have businesses to run. They may want to provide great pension plans but don’t always have the time or resources for the additional responsibility of managing them. Outsourcing the governance, investments, member communication and administration of their DC scheme can take the pressure off.
Legal & General’s Mastertrust offers employers a complete DC pensions service. Not only does it help ease the burdens of managing the scheme but has a range of investment and retirement solutions that aim to support members throughout their pension-planning journey.
Our Mastertrust offers:
- a rigorous and transparent governance structure
- a diverse group of independent, experienced trustees supported by an independent investment adviser, scheme auditor and legal team
- a Mastertrust employers’ group and an online member community providing forums for employers and members to give feedback to the trustees
- a broad range of investment solutions which are easy to understand and continually evolving with the aim of meeting members’ needs, including fund options that take considerations of environmental, social and governance matters into account
- full scheme administration, including auto-enrolment record-keeping, documentation and engaging member communications.
Responsible investing
Our responsible investing site hosts a range of educational and thought-provoking articles, blogs and videos as well as helpful information on our latest stewardship activity.
ESG in DC: UK member research 2023
Despite the cost-of-living crisis, ESG investing remains a priority for most DC members. Our research suggests that many would even be prepared to pay higher fees to see their funds supporting ‘green’ initiatives.
Retirement Solutions
DC strategies
These are exciting times for DC investors. The government’s agenda of ‘Freedom and choice’ gives DC members much more control of how they want to generate and manage their retirement income.
Target Date Funds
One of L&G's flagship DC strategies, providing a to-and-through retirement solution for UK DC investors.
When building the TDF strategy, we started by understanding the needs and requirements of our customers. This included talking to members and employers/trustees to understand and prioritise what was important to them.
As a result of this research, we decided on a target date fund structure for the following reasons:
- The concept is easy to explain to members as they can choose one fund for their entire journey and the fund they invest in is defined by their selected retirement date
- The investment strategy of the funds can be changed quickly and efficiently to take account of changes to the regulatory environment, member behaviour or market developments
- It offers a to-and-through retirement strategy giving members access to high levels of growth early in the strategy, managing risk as retirement approaches and remaining invested into retirement, providing a truly end to end solution
By structuring the funds as five-year buckets, flexible and phased retirement patterns are taken into account.
Multi-asset funds
By choosing a multi-asset fund DC investors can avoid having concentrated exposure to any one type of asset class or driver of returns. Risk management is also an essential element of multi-asset investing, aiming to help reduce the chances of poor outcomes for investors.
Multi-Asset Fund
The Multi-Asset Fund is a globally diversified fund that seeks to help members grow their retirement savings in a cost-efficient way. The fund is designed to help DC pension scheme investors who are looking for long-term growth but with less volatility than a pure equity fund.
Future World Multi-Asset Fund
The Future World Multi-Asset Fund has been designed for DC pension investors who wish to go further in integrating environmental, social and corporate governance (ESG) factors into a genuinely diversified strategy. The fund aims to be straightforward and transparent in its approach, using our Corporate Governance team’s expertise by investing in Future World index funds that track LGIM-designed ESG indices or other index funds where relevant. The fund takes our approach to climate change one step further by incorporating LGIM’s innovative Climate Impact Pledge.
Diversified Fund
The Diversified Fund is designed for long-term DC pension investors seeking to grow their pension savings by accessing pure market exposure. The fund aims to provide a rate of return that’s broadly similar to that of developed market equities over the long term but with lower volatility.
Diversified Multi-Factor Equity Fund
The Diversified Multi-Factor Equity Fund is a global, strategic multi-factor equity fund that targets factors that aim to improve investor outcomes, and diversifies away from concentration risk. The fund aims to reduce risk versus the global equity market through a broad exposure across regions and sectors, and reduced stock-specific concentration.
Retirement Income Multi-Asset Fund
The Retirement Income Multi-Asset Fund is designed for DC investors who would like to draw an income directly from their pension fund while remaining invested for future growth potential. The fund invests globally in a range of different asset classes and uses innovative cashflow thinking to help manage the risk of running out of capital for members redeeming fund units over time.
Future World Annuity Aware funds*
Our experience as one of the UK’s largest annuity providers means we are well placed to help members who are looking to purchase an annuity, to invest with this in mind. For instance, as members approach retirement, they may prefer to invest in a fund that focuses on preserving the value of the annuity they can buy, rather than on growing the value of their assets.
Future World Annuity Aware fund range is specifically designed for this purpose.
We offer members a choice of three funds, depending on how closely linked to inflation members would like their future annuity purchase to be.
*Prior to 31 December 2022, the funds in the range were known as: the Pre-Retirement Fund, Pre-Retirement Inflation Sensitive Fund, Pre-Retirement Inflation Linked Fund
Responsible investing at LGIM
Through a combination of engagement and voting at company meetings for shareholders to promote better practices, we target both public and private assets. Our aims are to strengthen long-term returns and raise market standards based on investment stewardship with impact and collaborative, active research across asset classes.
FTSE TPI Global (ex. Fossil Fuels) Equity Index Fund
The FTSE TPI Global (ex. Fossil Fuels) Equity Index Fund was created to provide diversified exposure to companies that are aligned to the Paris Agreement and to reap the benefits of the climate transition, while going beyond a narrow focus on carbon emissions and fossil fuels.
Based on FTSE Russell’s FTSE Global Equity Index Series, the fund tracks a range of global, diversified securities, weighted according to the risks and opportunities arising from the global transition to a low carbon economy. The fund’s constituents are adjusted based on their fossil-fuel reserves, carbon emissions and green revenues, as well as on the Transition Pathway Initiative (TPI) analysis of how the world’s largest and most carbon-intensive public companies are managing the climate transition. Additionally, the fund excludes fossil fuel, tobacco, controversial weapons and UN Global Compact violators.
Future World Fund
The managers of the Future World Fund invest in a way that integrates environmental, social and governance criteria and the principles of responsible investing.
The fund targets better risk-adjusted equity returns than a traditional index strategy by incorporating ‘factors’ into index design, while also seeking to address the investment risks associated with climate change.
LGIM has made a commitment to address climate change by engaging directly with the largest companies in the world who are critical to the shift to a low-carbon economy.
The fund managers refrain from investing in companies which hinder the global transition to a low-carbon economy. They also do not invest in pure coal mining companies, controversial weapons manufacturers or UN Global Compact violators, as well as companies that do not adhere to minimum globally accepted business practices.
Responsible investing
Our new site for responsible investing hosts a range of educational and thought-provoking articles, blogs and videos as well as helpful information on our latest stewardship activity.
These are exciting times for DC investors. The government’s agenda of ‘Freedom and choice’ gives DC members much more control of how they want to generate and manage their retirement income.
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Get in touch
Get in touch
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Key risks
The value of any investment and any income taken from it is not guaranteed and can go down as well as up, and investors may get back less than the amount originally invested. The risks associated with each fund or investment strategy should be read and understood before making any investment decisions. Further information on the risks of investing is available from L&G's Fund Centres.
While L&G has integrated Environmental, Social, and Governance (ESG) considerations into its investment decision-making and stewardship practices, this does not guarantee the achievement of responsible investing goals within funds that do not include specific ESG goals within their objectives.