A pension plan is a long-term investment so its value can fall as well as rise and your members could get back less than was paid in.
What is a blended fund?
A blended fund is a way of customising the investment options offered to workplace pension scheme members. You could think of it as a "fund of funds" structure.
Standard Life can offer you a blended fund solution as an additional alternative to our mainstream default options. Blended funds can open up a whole world of flexible, customisable default investment options and we can carefully design them around the needs of your members - and your business.
Even if you're familiar with funds and investments, we'd always recommend getting advice on the suitability of these solutions for your particular business needs. Note that there's likely to be a cost for this.
What kinds of pension plans are suitable for a blended fund?
You can develop a blended fund if your Standard Life pension scheme is one of the following:
- Own Trust
- Master Trust (subject to the approval of the Master Trust Trustees)
- Group Flexible Retirement Plan (GFRP)
- Group Self-Invested Personal Pension (GSIPP)
In our experience, blended funds are generally considered for schemes with more than £10 million in assets over the last three years. That said, we do have them set up for smaller schemes too and we'll always assess this on a case-by-case basis. So it isn't a hard and fast rule.
For smaller schemes or where a simpler approach appeals, you could always consider our off the shelf default solution for your members.
Blended fund pros and cons
Can be great for...
- selecting underlying funds to suit your particular business sector
- customisable flexibility and scalability to fit your members' investment needs
- branding and colleague engagement - some clients work with Standard Life to incorporate their business name into the name of the fund, giving it recognisability and visibility to your members.
- they need a hands-on commitment to taking an active role in making investment decisions and monitoring performance
- they may not be the right choice for all scheme sizes (because they can have additional admin, set-up costs and governance required).
Governance and blended funds
We manage all of the blended funds we offer within a comprehensive governance framework supported by robust processes.
The aim of this is to reassure you that the right people set them up, monitor and review them.
Costs and blended funds
Most blended funds will have a Fund Management Charge (FMC). Additional Expenses (AE) can vary in line with the underlying funds which sit below the blended fund in the structure.
This means that if the funds or the proportions of the funds in the structure change, the associated costs are likely to change too.
Interested in creating a custom investment option?
If a blended fund might be right for you, we're ready to help. We have long-term experience developing customised fund solutions for our employers. We'll sit down and discuss aims and objectives in detail with you, to help you arrive at the right solution for your workplace pension scheme.