BlackRock extends target-date funds to more DC schemes

Pensioner with caneBlackRock is extending access for UK pension schemes to its LifePath range of target-date funds.

BlackRock says it expects a surge in demand for these types of funds due to new auto-enrolment pension laws.

It predicts assets in UK target-date funds to quadruple to £8 billion (€9.4 billion) by 2018 as auto-enrolment takes effect, mirroring US trends of growth.

Workplace pension schemes that use BlackRock’s bundled defined contribution (DC) offering – which covers scheme administration, investment funds and member engagement tools - can now access the LifePath range of annual target-date funds.

Previously, these were only available to a limited number of pension schemes, which were managed by third-party administrators on an investment-only basis.

Quoting statistics from the National Association of Pension Funds, BlackRock says the DC market in the UK is estimated to be worth £500 billion, but just 0.4% of these assets are thought to be held in target-date funds.

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