Electrical pension scheme opts for target date default funds

Pensioner with caneA UK pension scheme for the electrical contracting industry is to offer flexible target date funds to its members as it prepares for auto-enrolment.

The BlueSky Pension Scheme has selected Alliance Bernstein to run the funds as a default option and they will be offered to all members from 1 October this year.

The Alliance Bernstein open architecture product seeks to smooth the ride for members by using its proprietary dynamic asset allocation (DAA) process. One of the aims of DAA is to reduce the impact of extreme market events, such as those that took place in 2008 and 2009, the company said.

Flexible target date funds are seen as an alternative to the typical lifestyle strategy currently employed in the UK defined contribution (DC) market.

The British government will introduce auto-enrolment from 1 October 2012. It will mean workers are enrolled into their employers’ pension schemes with no active decision on their part.

The Blue Sky Pension Scheme (formerly known as the JIB Pension Scheme) is an industry-wide, multi-employer scheme for the electrical industry. It has over 18,000 members and over £230m (€260.7bm) of assets under management.

Paul Bannister, chief executive of the BlueSky Pension Scheme, said: “In advance of auto-enrolment, we have undertaken a complete overhaul of our scheme to ensure that we continue to offer the best possible solutions for our employers and their members. The appointment of Alliance Bernstein as the default fund provider and the introduction of flexible target date funds are critical components of this project.”

The selection of Alliance Bernstein’s flexible target date solution was researched and recommended by Dean Wetton of DWA.

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