The Pace Trustees have reviewed the way the three Pace DC Target investment options work, including the default option.
We took advice from our investment adviser and considered how much investment risk members could take at different ages and how much they might save for their retirement. Following this review, we decided that members who are more than 15 years from their chosen retirement date should have more of their pension account invested in equities (company shares). Although equities are higher risk, they also offer a higher expected return – which may help to improve members’ outcomes at retirement.
We’ve now made this change to the three Target options of the scheme. New joiners to Pace DC have been contributing to the new fund since December 2020 and for existing members of Pace DC the change will took place in February 2021. Whilst the funds were being switched there was a short amount of time where you couldn't make changes to your Pace DC account - this is known as a ‘blackout period’ and ran from 8th – 22nd February 2021. The updated investment guide explains the changes in more detail. If you’re in one of the Target investment options but have less than 15 years to go until your chosen retirement date, the changes won’t affect you.
We’ve also added a new equity (shares) fund to the range of funds available to members: the Pace Growth (Shares) 2021 Fund. We believe this is more suitable than the current Pace Growth (Shares) Fund – it spreads investments between companies more evenly, and it also invests more in companies with strong and improving Environmental, Social and Corporate Governance attributes. The old fund is now closed to members wishing to start investing in shares after the December 2020 payroll date. Further information on the new fund is provided in the updated investment guide. The fund factsheet for the Pace Growth (Shares) 2021 Fund can be found here.
We also wrote to members invested in the Pace Growth (Shares) Fund in December, giving them the option to remain in the old fund should they chose to do so (otherwise they will also be switched to the new fund – they will still be able to switch their investments to the new fund at a later date if they want). If you recently switched investments into the Pace Growth (Shares) Fund we may not have written to you – in that case, you’ll remain in the ‘old’ fund but will be able to switch in the future if you want.