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Changes to our investment approaches for existing schemes

The new pension rules of April 2015 have changed the way people take income when they retire. With more options available, we’re altering our existing range of investment strategies to make them more suitable for the new world. 

Click on the tabs below for details of how and when we’re changing each approach.

Which products are affected?

Existing policies in the following UK pension schemes are affected by these changes:

  • Company Pension (aka Designer Pension)
  • Company Stakeholder Pension (Designer Stakeholder)
  • Personal Pension
  • Stakeholder Pension
  • Your Pension @ Aviva
  • Your Pension Select @ Aviva
  • CGU Personal Pension Plan
  • CGU Personal Pension Plan Lifestyler Plus
  • Commercial Union Personal Pension Plan
  • PERSONAL PENSION PLAN (98 SERIES) (UK)
  • Pre-95 Personal Pension Plan (UK)
  • Your Pension @ CGU
  • Staff Pension Scheme Replacement
  • Millennium Range - Variable Money Purchase Plan and AVC
  • Optimiser/Lifestyler Pension
  • Executive Pension Plan
  • Directors Pension Plan
  • CGU Group Personal Pension
  • Sterling Range - GPP, IPP and Free Standing AVC
  • Variable Group AVC
  • Variable Money Purchase Plan
  • Aviva Defined Contribution Replacement

Summary of what’s changing

We are introducing a new range of Lifestyle, Self-style and Phased Switching options which are designed for policyholders who, at their chosen retirement age, want to:-

  • take some of their money as and when they need it, either as cash sums or as income drawdown, or
  • leave their money where it is and make their choices later.

This complements our existing range of approaches which target an annuity outcome at retirement. The name of each of these approaches will also change to indicate their annuity target outcome, as shown in the table below.

All of the approaches work in the same way as they do now apart from the funds in the final phase. Please see the table below for details of the final phase drawdown and annuity fund splits.

Existing Lifestyle Investment approach name

New Lifestyle Investment approach name

 Final phase funds

N/A

Mixed Investments Drawdown Lifestyle approach

 

25% Aviva Deposit & 75% Aviva Diversified Assets Fund I

N/A Stakeholder Mixed Investments Drawdown Lifestyle approach

N/A

Global Shares Drawdown Lifestyle approach

N/A

Self-style Drawdown approach

25% Aviva Deposit & 75% Aviva Diversified Assets Fund I
  or
100% Aviva Diversified Assets Fund I

N/A

Phased Switching Drawdown approach

Mixed Investments
Lifestyle approach

Mixed Investments Annuity Lifestyle approach



25% Aviva Deposit & 75% Aviva Long Gilt
 Stakeholder Mixed Investments Lifestyle approach Stakeholder Mixed Investments Annuity Lifestyle approach

Global Shares Lifestyle approach

Global Shares Annuity Lifestyle approach

Self-style Lifestyle approach

Self-style Annuity approach

25% Aviva Deposit & 75% Aviva Long Gilt
  or
100% Aviva Long Gilt

Phased Switching approach

Phased Switching Annuity approach

Why we’re making this change?

The de-risking phase of our current lifestyle and phased switching approaches use a fund designed for customers who will buy an annuity when they retire (the Aviva Long Gilt fund).

Under the new rules, however, our expectation is that fewer people will want an annuity when they retire. So we are introducing a new range of options using a mixed asset fund that's better suited to the new pension freedoms  (the Aviva Diversified Assets Fund I).

Diagrams of the changes

The diagrams below show our new range of Lifestyle, Self-style and Phased Switching options. For larger versions of each diagram, please download our investment approach changes presentation.

Mixed Investments Drawdown Lifestyle approach
Mixed Investments Drawdown Lifestyle approach

Global Shares Drawdown Lifestyle approach
Global Shares Drawdown Lifestyle approach

Self-style Drawdown approach
Self-style Drawdown approach

Phased Switching Drawdown approach
Phased Switching Drawdown approach

Stakeholder Mixed Investments Drawdown Lifestyle approach
Stakeholder Mixed Investments Drawdown Lifestyle approach

Mixed Investments Annuity Lifestyle approach
Mixed Investments Annuity Lifestyle approach

Global Shares Annuity Lifestyle approach
Global Shares Annuity Lifestyle approach

Self-style Annuity approach
Self-style Annuity approach

Phased Switching Annuity approach
Phased Switching Annuity approach

Stakeholder Mixed Investments Annuity Lifestyle approach
Stakeholder Mixed Investments Annuity Lifestyle approach
* If there's less than five years until your chosen retirement age when you start your plan:

  • New payments will be invested 75% into the Aviva Long Gilt fund and 25% into the Aviva Deposit fund.

  • They won't be invested in the Aviva Mixed Investment (40-85% Shares) fund.

     

  • How are policyholders affected?

    • Policyholders will remain in their current investment approach, unless they decide to choose another option. However, the name of the approach will change. We will notify policyholders of the name of the approach via their annual statement.
    • We’ll write to customers currently in the de-risking phase (or due to start it within 24 months) to notify them that there are alternative options.
    • They will have the option to switch into the new drawdown version.
    • What happens to policyholders who do not wish to switch?

      Policyholders currently invested in ‘Mixed Investments Lifestyle' will remain in the approach, but the name will change to the Mixed Investments Annuity Lifestyle approach:
      Mixed Investments Annuity Lifestyle approach  
      Policyholders currently invested in 'Global Shares Lifestyle', will remain in the approach, but the name will change to the Global Shares Annuity Lifestyle approach:
      Global Shares Annuity Lifestyle approach
       
      Policyholders currently invested in ‘Self-style Lifestyle’, will remain in the approach, but the name will change to the Self-style Annuity approach:
      Self-style Annuity approach

      Policyholders currently invested in ‘Phased Switching’, will remain in the approach, but the name will change to the Phased Switching Annuity approach:
      Phased Switching Annuity approach
         
      Policyholders currently invested in 'Stakeholder Mixed Investments Lifestyle', will remain in the approach, but the name will change to the Stakeholder Mixed Investments Annuity Lifestyle approach: 
      Stakeholder Mixed Investments Annuity Lifestyle approach

    * If there's less than five years until your chosen retirement age when you start your plan:
  • New payments will be invested 75% into the Aviva Long Gilt fund and 25% into the Aviva Deposit fund.

  • They won't be invested in the Aviva Mixed Investment (40-85% Shares) fund.
  • When are the changes happening?

    We have no firm date for delivering these changes. We’re aiming to do this during 2016.

    How and when are we communicating the changes?

    Here are details of how and when we’re informing advisers and policyholders about the changes:

    Who

    How we're communicating the changes

    When*

    You (financial advisers)

    If you haven't heard from us already, we'll be in touch in one of two ways:

    • A direct contact from your account manager
    • Or a letter detailing which of your accounts and policyholders are affected.

      Note:- there are no definitive changes, just options.

    October 2016

    Policyholders

    • We will write to customers who are in the de-risking phase or who are within 24 months of the de-risking phase advising them that there are alternative options.
    • The letter will be 'positive affirmation', meaning they must tell us if they want to move to a drawdown approach.
    • Policyholders will be informed of the name of their investment approach via their annual benefits statement.

    2016

    * We intend to aim for these dates, however they are subject to change.

    Related documents?

    Aviva Diversified Assets Fund brochure  
    Learn about the Diversified Assets Fund I, which we're using as the de-risking fund for all our Lifestyle and Phased Switching approaches.

    Why the Aviva Diversified Asset Fund?

    Default requirement

    Suitable?

    Aviva DAF I solution

    Suitable for the most common outcome

    green tick
    • Yes - based on research, typical client wants to remain invested.

    Suitable for clients who are not sure what outcome they want

    green tick
    • Aviva DAF I low risk approach means the fund genuinely de-risks clients invested in higher risk accumulation funds.

    Provided within 0.75% charge cap

    green tick
    • Designed to operate within the overall charge cap of 0.75%.

    • The additional yearly charge for Aviva DAF I is 0%.
    • The fund manager expense charge is 0%.

    In line with DWP guidance

    green tick
    • Objective: Describes how the fund manages risk through volatility targets.

    • Affordability: Yes – passive components to make sure it’s cost effective.
    • Diversified asset allocation: Yes – managed risk through diversified asset allocation across cash, bonds and equities.
    • Regular reviews conducted: Yes - Aviva responsible for regular reviews of Aviva default strategies.

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    WA04185 10/2016