AllianceBernstein launches target date funds for DC pensions

AllianceBernstein has launched a range of target date funds for defined contribution (DC) pension schemes.

The range of retirement strategies funds combines the features of the traditional approaches of lifestyling balanced (diversified growth) strategies and liability-driven investment.

The funds are aimed at occupational and contract-based DC scheme members who do not have the time or inclination to make their own investment decisions and end up in a default fund, where the decisions are made for them.

The target date funds progressively de-risk as a member approaches their expected retirement date. Rather than swapping between many different funds, the portfolio adjusts within a single fund as the member gets closer to retirement.

David Hutchins, head of DC investment research and design at AllianceBernstein, said: “Following the launch of our customised retirement strategies funds a year ago, we have seen a growing level of interest in target date funds in the UK DC market.

“The launch of this new range of retirement strategies funds potentially brings the benefits of the target date approach to a much wider range of DC pension savers and providers, offering high value at reasonable cost.

“With the introduction of the national employment savings trust (Nest) now little more than a year away, we believe the target date fund approach will become a key feature of pension saving in the UK.”

Read more articles on occupational and contract-based DC pension schemes