LEARN MORE ABOUT Member altruism and financial wellbeing
Three Minutes With
How can a Master Trust like Aegon’s help?
There is best described as a ‘mega trend’ underway in the UK pension system with DC scheme consolidation – this is putting Master Trusts in the spotlight.
This consolidation trend can provide an opportunity for employers to address employee’s emerging and growing desire to invest responsibly and sustainably. If this is addressed, it can also result in helping improve employee’s sense of well-being – which is especially important in the current challenging times.
The good news is that a Master Trust like Aegon’s has the economies of scale that enables us to research, identify growing trends and develop our proposition. We can therefore engage members with relevant investment strategies, as well as provide broader support for employee’s financial well-being.
Master Trusts will see their sustainability credentials, reputation, and performance become decisive factors that employers consider.
Recognising that member’s altruistic values are a powerful emerging force – this offers the opportunity to help members achieve their goals for their retirement savings to do well but also to do good.
We can therefore engage members with relevant
investment strategies, as well as provide broader
support for employee’s financial well-being
The appeal of responsible sustainable investing is
compelling - once it is highlighted to members
Member altruism and financial wellbeing - what does this mean in the context of workplace pensions?
Quite simply, people want their money to do well but also to do good. Our latest white paper explores this as DC scheme members increasingly want their retirement savings to be invested responsibly and sustainably – this provides a compelling new line of engagement.
Recent research we carried out identified that 57% of members want this – yet only 31% of pension schemes are investing in this way – so there is a mismatch.
When member’s retirement savings are invested responsibly and sustainably – and this is effectively communicated to them - there is a positive correlation with an improved sense of well-being.
People are realising that their retirement savings can have a huge and positive impact on our society and our environment as well as on their returns.
You can
watch the interview here
or read his views below
Andy Dickson, Master Trust Strategic Development Director at Aegon UK, explains when DC scheme members’ retirement savings are invested responsibly and sustainably, that this could be the key to improved engagement and performance in DC pension schemes.
Introduction | Retirement savings doing well and doing good | Part of the solution | Master Trusts
Master Trusts
Part of the solution
Retirement savings doing well and doing good
INTRODUCTION
Scroll down
Three
Minutes
With
Andy Dickson, Master Trust Strategic Development Director, Aegon UK explores the correlation between DC scheme member altruism and financial wellbeing
Columbia Threadneedle Investments' Sonal Sagar & Michael Hamblett
INTRODUCTION | ASSET CLASS | THE FUND | portfolio snapshot
portfolio snapshot
THE FUND
ASSET CLASS
INTRODUCTION
Why is this becoming a focus now?
We are facing a cost-of-living crisis, as a result of significant inflation surge, an energy crisis, and a climate emergency. It does feel like a very real challenging time.
When we demonstrate to employees that their retirement savings can be part of the long -term solution, rather than part of the problem - show them that their money can actually make a meaningful difference in areas such investing in the transition to clean renewable energy - we can encourage them to maintain contributions at a difficult time.
In fact, nearly 50% of millennials are motivated to increase their contributions, when responsibly invested, if they can afford to do so.
This is a growing trend that I firmly believe will become the ‘new normal’ and be expected by members in future.
An example of how consumer behaviour can fundamentally change is if we look at the recycling revolution – 88% of people have changed how they use plastics by reducing and recycling.
There is still some disconnect between what pension scheme members want and how their retirement savings are actually being invested.
The appeal of responsible sustainable investing is compelling - once it is highlighted to members.
Coats Group makes thread, which is an energy and water intensive process, but essential for clothing, footwear and other industrial applications. Coats is attempting to make the process greener and more sustainable by targeting reductions in water consumption and carbon emissions. The company has also pioneered a fully recycled thread, using no virgin plastic.
This is an example of the type of company we look for in the Threadneedle UK Sustainable Equity fund: a company that is perhaps under the radar, but a leading player in a fragmented market, standing to benefit from consumer trends towards sustainability.
We met the company’s head of sustainability to understand how its non-financial risks and sustainable opportunities are managed, and our opportunity to ask questions and bring the investment case to life, far more than reading the annual report.
Threadneedle UK Sustainable Equity Fund: Portfolio snapshot
Coats Group
Johnson Matthey
Reckitt
Johnson Matthey is a chemicals company that makes solutions for cleaner energy and cleaner air. It has an experienced board and is investing in new and future technologies such as fuel cells and hydrogen. To continue driving its sustainability agenda, this year, it is incorporating ESG and sustainability criteria in executive pay.
Improvements are expected in its top line, margin and cash flow. We believe it is undervalued and, when you combine that with the fact that well over 80% of its revenues contribute to the UN SDGs, it is one of the leading companies within the fund.
To have confidence in our investment, engagement is key. We have met management, board members and collectively engaged with the UN Principles for Responsible Investment on its supply chain. This gives us a better understanding of the risk/return characteristics.
Reckitt is a health, hygiene, and nutrition company. It has had big changes in management and strategy over the last few years and now it is embracing its size and scope, driving more from the group level. As a result, it is well-positioned to effect change.
There is a big focus on how its products are made, with reductions in energy and water usage and more recycling. Reckitt works alongside governments and public health bodies to educate people on issues including cleanliness, infant nutrition, sexual health – this is on top of the positive impact of its products within its hygiene, health and nutrition divisions.
Again, engagement is key: we have met the CEO, CFO, chair, directors in charge of executive pay, heads of sustainability to enable us to get a holistic picture of how the company is improving its management of ESG and sustainability.
Tap on each image to show details
Tap to go back to options
Source: Morningstar as at 31 July 2021, net of fees, based on Z Acc share class (ISIN: GB00BZ21SS97). Net performance using 12pm prices, unadjusted income reinvested. Peer group is IA UK All Companies. The index is a Composite benchmark. The fund launched 30 October 2015. Past performance is not a guide to future performance.
Threadneedle UK Sustainable Equity Fund: Performance (%)
Fund (net)
FTSE All-Share
IA UK All Cos
3yr
5yr
2020
2019
2018
2017
2016
Since Launch
Year to Date
18.6
44.5
-0.5
21.6
-7.0
14.0
6.7
53.4
9.5
6.6
27.0
-9.8
20.5
-9.2
12.4
12.3
38.8
11.7
12.7
44.0
-7.7
21.9
-10.3
13.0
11.7
49.5
12.3
Corporate action
MENU
Three Minutes With
INTRODUCTION
Video interview
State of the Market
The Challenge
Our Offering
CLOSE MENU X
Introduction | Retirement savings doing well and doing good | Part of the solution | Master Trusts
Corporate action
Master Trusts
Part of the solution
Retirement savings doing well and doing good
INTRODUCTION