Designing a Default Fund Aligned to the Climate Beliefs of its Members

Redington

Tuesday, Dec 22
|   2 mins

10 second summary

  • We designed and implemented a new DC default fund for the HSBC Bank Pension Scheme that aligned with both the return requirements and environmental beliefs of members.

What was the problem?

  • The HSBC Bank Pension Scheme wanted to create a default DC Scheme that aligned with the climate beliefs of its members whist remaining within the charge cap.

What was our solution?

  • The first step was to select a fund manager. After carrying out detailed research and discussing the challenge, we selected L&G.
  • We briefed them to design a fund that matched the environmental criteria of the members whilst meeting a risk/return profile that aligned with the Scheme’s overall objective.
  • Our Risk Assessment team and CIO delved into the figures using our proprietary modelling and analysis to assess whether the fund had the potential to produce good risk-adjusted returns in the future.
  • Once we were happy with the resulting fund (the LGIM Future World Fund), we provided guidance on Scheme communications to make members aware of the changes to the default strategy.

What was the outcome?

  • We, along with L&G, successfully built and launched the LGIM Future World Fund: a passive factor-based global equity fund, designed for DC schemes looking for an alternative to a traditional index strategy that addresses the long-term financial risks of climate change.
  • The fund allows HSBC members to reflect their views on climate change without sacrificing their future retirement income.

What does this mean for you?

  • We can help you design and implement a default fund that meets both the return requirements and environmental beliefs of its members.

Want to know more? 

If you would like further information, please contact:

Jonathan Parker

Jonathan Parker

Head of DC & Financial Wellbeing

I am the lead advisor for institutional clients and assist in-house functions of pension schemes with the delivery of consultancy services.

Maggie Kearney

Maggie Kearney

Director

My role at Redington is working with clients who have any sort of DC arrangement to make sure it is best in class and provides good member outcomes

Sadia Rahman

Sadia Rahman

Director

My experience working with institutional investors gives me insight into their challenges allowing me to connect them with the right information, people and solutions at Redington to achieve their desired outcomes.

Pin It on Pinterest