Aviva's Retail Master Trust

00:00:03:18 - 00:00:04:16
Welcome, everyone.
Today we're discussing the important steps that you need to take in the five years in advance of your retirement age.
And the options that are available to you when you draw down on your retirement funds.
Joining me today is my colleague Richard Hales.
Thanks for being here, Richard.

00:00:18:16 - 00:00:23:12
Thanks, Claire. I am excited to share some valuable information with our viewers today.

00:00:23:12 - 00:00:25:15
Let's start with what people should be thinking about coming up to their retirement age.

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Sure, it's a really crucial time in terms of making some investment decisions and really fine tuning your retirement plans.
There's a couple of important steps that I recommend everyone to take at this point.
First of all, have a look at your current pension scheme.
How much are you paying in there?
Is that going to give you the retirement that you want?
Gather up all the paperwork, for example your pension benefit statements.
Next of all, look at any previous schemes that you were paying into in the past.
While you may not be paying into them anymore you're still entitled to those benefits.
Find out when you can access those benefits.
That's really important.
Next of all have a look at your fund range across the board.
Are those funds and those decisions that you made still appropriate for youat this point in your life?
If not, you may have a decision to make.
Next of all, have a look at any other assets that you might have.
What I'm thinking about here really is your savings, your investments, maybe even some rental income that will help support you in retirement as well.
Lastly, then have a look at all of your benefits projected out to retirement.
What does that fund like and compare that against what your estimated costs are going to be in retirement.
If there is a shortfall, now is the time to do something about that, whether that's increasing your pension contributions, maybe make an additional voluntary contribution or AVC to the scheme,or doing something as simple as making a fund choice decision.
Always talk to your financial advisor though, in terms of making any decisions here, because they would be best placed to tell you whether your financial plans are equal to your financial goals.

00:01:37:23 - 00:01:39:10
That sounds like solid advice.
Can you tell us about the different retirement options that are available to the members?

Yeah, sure. Absolutely.
Look, when you get to retirement, all members are going to have several choices and some important decisions to make.
That's why we always advise people to talk to your financial advisor again.
So when you do get to retirement, you are entitled to a maximum tax free cash.
And with the balance you can buy an annuity, which is a guaranteed payment payable for life.
Or you can invest in what's known as an approved retirement fund or ARF for short, which offers greater flexibility in terms of income drawdowns.
There's going to be pros and cons, advantages and disadvantages to all of those options, and every member
situation will be different.
So that's where advice really comes back into it as well.
An annuity, for example, does offer you the security of a guaranteed income for life, but there's not much flexibility with that.
The ARF, on the other hand, does offer great flexibility when we're talking about investment decisions and investment choices that you have and income drawdown.
But with that comes an element of investment risk.
So all members need to ask themselves what are their the income needs in retirement and what's their tolerance to risk?

00:02:36:21 - 00:02:38:17
Thanks Richard for sharing these insights.
Do you have any more useful tips for our viewers?

00:02:40:18 - 00:02:41:09
Sure, yeah.
In terms of final tips, what I'd say is be informed and be proactive.
What I mean by being informed is keep on top of your pension scheme.
Make sure you know what value it is and what the projected benefits are going to look like.
If there is a shortfall, or there is something that happens in the markets, etc. that kind of thing.
Be proactive.
Talk to your financial advisor about what decisions you can make to make up on that shortfall.

00:03:00:17 - 00:03:01:13
Great advice.
Thanks again, Richard, and thanks to our viewers for joining online.
Remember that preparing for retirement is a crucial step in ensuring that you have a comfortable future in retirement.

00:00:03:13 - 00:00:04:15
Welcome, everyone.
Today we are talking about the importance of retirement planning and the tax reliefs that are available on your pension contributions.
Joining me today is my colleague Stephen Rice.
Thanks for being here, Stephen.

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Hi, Claire, thanks it's great to be here today to share some valuable insights and information in relation to retirement planningwith scheme members.

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Okay, so let's start with the basics.
Why is it so important to plan for retirement?

00:00:27:10 - 00:00:29:21
Look, I think now more than ever it's really important that people have a proper plan in place for how they're going to fundtheir retirement.
If you look now at age longevity, people are living longer.
And it wouldn't be unusual for someone to live for 20 plus years beyond retirement.
So they need to have a plan as to how they're going to fund that.
And in reality, whilst the state pension is a good pillar of that post-retirement income for most individuals, if you're
solely reliant on the state pension,it is going to see a significant drop in income that they're currently expecting to have in retirement.

00:00:57:16 - 00:00:59:16
So having a proper plan in place in terms of how you're going to fund your retirement and the lifestyle that you expect to have is really, really critical and crucial.

00:01:05:20 - 00:01:06:19
That makes sense.
Can you tell us more about the tax reliefs that are available on the contributions?

00:01:11:06 - 00:01:13:23
There's three different types of tax reliefs that are available currently on pension provision.
So the first one is the tax relief on the contributions that you actually make to your pension.
The second is the fact that your fund can actually grow tax-free right up to retirement.
And the third is that at retirement individuals will actually be entitled to take a portion of their fund as a tax-free lump sum.
For the purpose of this though I just want to touch on the first point there and the tax relief on contributions, because this is a really important one for those who are actually saving for retirement.
And tax relief is available at your marginal rate.
So either 20% or 40% depending on what tax rate you pay.
So if you take that into a kind of a Euro example, if someone's making a contribution of €100
a month into their pension and they're a 40% tax payer, that means for that €100 to actually be invested in their pension is only actually costing them €60.
And because in most instances scheme members will have their contributions deducted at source,it means that the tax relief is immediate and they're not having to go through the process of actually claiming that back at year end or when they're doing the tax returns, for example.

00:02:13:18 - 00:02:15:07
That's a great benefit.
Are there any restrictions that apply to the tax reliefs that are available?

00:02:19:11 - 00:02:20:24
Yeah, there are a couple of restrictions imposed by the Revenue.
But they are relatively generous.
So for example, if someone's in their 30s, they're entitledto put up to 15% of their salaryinto pension and claim tax relief.
And that scales up then depending on people's age.
So for example, for those who are at age 60 or over, they can put up to 40% of their salary into a pension and claim the tax relief available.
And the only other restriction is around the actual salary levels that can be used.
So the Revenue do impose a cap of €115,000on what people can actually claim tax relief on.
So if you're earning a salary above that, the percentage of your salary is still capped at €115,000.

00:02:59:12 - 00:03:01:23
That's good to know that there are restrictions.
Are there any other benefits to planning for retirement?

00:03:05:04 - 00:03:07:14
Yeah, in general, when you're talking about planning for retirement, there are two key ways that you can actually build an adequate pot.
The first is the level of contributions that are available to you and that you make.
And the second is investment growth.
So just touching very quickly on the first one, in a lot of instances, employers will also make a contributionto the pension scheme on your behalf.
So I would encourage you to talk to your employer and understand what level of contribution is available and what that means for you and how that actually works.
The second is around the investment growth, and that is basically where your money is invested will grow over time.
And the more that that grows then obviously that will lead to a higher pot or potential pot at retirement.
So again, the critical thing is the earlier that you can start, you're getting more contributions invested.
You're giving your fund a longer time to grow.
And that ultimately should see you with a more adequate or bigger pot at retirement.

00:03:57:07 - 00:03:59:04
They are all brilliant insights.
Any other final tips for our viewers?

00:04:02:23 - 00:04:04:09
Yeah, I think the key thing for me in all of this is reviewing your pension on a regular basis.
And I think that's really important in the context of people as they move through the pre-retirement savings life cycle, they’ll have different events, different impacts, whether it's life events such as marriage or kids or buying a house, there will be times when they can make a little bit more of a contribution, there will be times
when maybe they'll want to reduce their contributions.
But I think at all times it's having those regular views so you understand the value of your pension now, but also what that actually means or how you're benchmarking versus your expectations at retirement.

00:04:37:09 - 00:04:39:07
That's really solid advice.
Thank you again, Stephen, and thank you to our viewers online.
Just remember that it is really important to start planning for retirement as early as possible in order to secure a more comfortable future for when you retire.

00:00:03:13 - 00:00:04:05
Welcome, everyone.
Today we're discussing the importance of retirement planning.
I'm joined today by my colleague
Claire Louise Murphy.
Thanks for being here, Claire.

00:00:09:22 - 00:00:10:24
Thanks for having me, Richard.
I'm excited to be able to share some important information for scheme members.

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So look, to begin with, why is it important for peopleto have a retirement plan?

00:00:18:03 - 00:00:22:05
Retirement planning is essential because it allows you the financial means to ensure that you can meet a lifestyle and cover expenses for when you stop working and in retirement.
Without a solid plan, you might not actually be able to make ends meet.
So planning ahead actually gives you the advantage of the growth in value of the funds that you invest your pension contributions in, the tax reliefs that are available, employer contributions,all of which can significantly boost your retirement savings.

00:00:48:03 - 00:00:49:04
That makes a lot of sense.
What should people consider when making a retirement plan?

00:00:51:12 - 00:00:55:06
When creating a retirement plan, people should consider the following:
Their current financial situation,they should assess their income, their expenses, their assets and their liabilities to understand where they are financially.
Their retirement goals,they should determine where they want to be in retirement and estimate the income that will be needed in order to meet that lifestyle.
So pension options, you should consider other factors.
So there's tax relief,there's employer contributions,there's added voluntary contributions and there’s investment options as well.
Regular reviews.
So review your plan regularly and make any adjustments to make sure that you stay on track with your goals.
And professional advice.
Seek professional advice from a financial advisor and they will be ableto create a plan with you that's tailored to your own circumstances.

00:01:37:06 - 00:01:39:18
There's some great ideas there, Claire on how to plan for retirement but can you tell us some of the common mistakes that people might make.

00:01:42:08 - 00:01:43:22
Sure, yeah, great question.
Some of the most common mistakes that people make are not having a retirement goal.
So a lot of people take a head in the sand approach to their retirement,which can be challenging then, because you don't know whether they're saving enough.
What they should do is determine the income that they would like in retirement and work backwards then to see are they saving enough?
Not adjusting contributions.
So failure to adjust your contributions when you receive an increase in salary could be a missed opportunity.
You should review and adjust your contributions to stay on track with your retirement goals.
Ignoring tax implications.
So not understanding how tax impacts your overall funding.
You should speak to a financial advisor who will be able and be very happy to speak to you around tax reliefs and how they work in practice.
So not seeking professional advice.
Retirement planning can be complexand not seeking professional advice can lead to costly mistakes.
A financial advisor can help you to create a comprehensive plan tailored to your circumstances.

00:02:41:15 - 00:02:44:17
Brilliant and how can members find out more about their pension plans with Aviva?

00:02:44:22 - 00:02:47:07
There’s lots of information that’s available for members.
So each member has access to an online portal.
And on there is lots of information about the contributions and the funds as well.
The portal also holds three very important and informative documents.
So the member booklet, the trust deed and rules, and the investment guide.
As well as that, every member receives an annual pension benefit statement and they can go online to the members hub on Aviva.ie

00:03:13:11 - 00:03:16:14
Brilliant, thanks, Claire. Do you have any final tips for our viewers today?

00:03:16:14 - 00:03:18:10
Yeah, my final tip would be to start planning for retirement as early as possible.
The earlier the start the more advantages you have to be able to build up your retirement fund.
Again, making adjustments to that fund and then seeking professional advice again so that a financial advisor can help you with your own plan to secure your future.

00:03:37:09 - 00:03:37:18
Brilliant.
That's great advice.
And thanks again, Claire, and thanks to all the viewers who have tuned in today.
Remember, creating a financial plan is a really crucial step towards a financial future.
If you're unsure who your financial advisor is, talk to your employer who will be ableto give you the details.
Bye for now.

00:00:04:00 - 00:00:04:18
Welcome.
In this video, we're going to talk about our My Future pension lifestyle strategies and some of the other funds that are available across our master trusts.
I'm delighted today to be joined by Amber Gleeson, an investment specialist with the Aviva Investors, who manage both the My Future lifestyle strategies and some of the other core funds on our platform.
Amber, you're very welcome.

Thanks, Steve.

00:00:23:02 - 00:00:26:07
So, Amber, I mentioned that My Future are our lifestyle strategies that sit across our master trust range.
Could you maybe give us a little bit of detail around what My Future actually is?

00:00:31:20 - 00:00:34:18
So as you've mentioned, My Future is a lifestyle strategy.
And what that means in very simple terms is just that your money is automatically de-risked as you approach retirement.
So earlier in your retirement savings life cycle, you'll be invested more in risk assets.
So for example equities.
And this is to try and generate a strong return.
But it's sensible to then de-risk into lower risk assets, for example bonds and cash, as you approach retirement.
If you're invested in My Future this de-risking process is automatically done for you by Aviva over the 15 years prior to your retirement.

00:01:04:19 - 00:01:06:14
Brilliant, so I think that automatic de-risking is really a key point for those who are saving for retirement.
We know that there are different ways that people can take their benefits at retirement.
Can you maybe just talk us through them, some of the different My Future lifestyle strategies that are actually out there.

00:01:17:15 - 00:01:20:10
Yeah so there's three different ways you can take your pension benefits in retirement:
either through an approved retirement fund, which is the default, an annuity or a cash sum.
So therefore we've designed three different strategies which automatically de-risk to an appropriate range of funds for each.

00:01:33:01 - 00:01:35:02
Perfect! So you mentioned there about the range of funds that sit under the hood of the lifestyle strategies within My Future.
Can you give us a little bit more detail around what those funds actually are?

00:01:41:18 - 00:01:45:01
Yes. So the core funds that are used are the fixed ESG funds, namely the fixed ESG 80 fund and the fixed ESG 20 fund.
Now, the equity content of the fund is what's the number in the fund name, so fixed ESG 80 fund has 80% in equities.
Fixed ESG 20 has 20% in equities.
And the funds are rebalanced back to these fixed weights on a monthly basis to ensure that they continue to provide performance in line with the underlying markets that they are tracking.
As I've mentioned, earlier in your retirement savings life cycle, we invested more in the Higher Risk Fund, which is the fixed ESG 80 fund, and then you'll gradually transition to the fixed ESG 20 fundover the 15 years prior to your retirement.
When you're five years out from retirement, you're then de-risked further into a range of funds that are most suited for how you intend to take your pension benefits, and this includes ensuring there's a 25% allocation to cash at your retirement date.

Perfect. So lots of choice there for those, depending on how your actually looking to take your benefits at retirement.
I think you touched on it there, performance is obviously absolutely key in terms of how people's pension will be adequate for them in retirement.
And you mentioned that these are tracking specific markets.
Maybe can you just give us a little bit of an overview as to how they've actually performed over the last 12 months.

00:02:57:03 - 00:03:01:16
So the fixed ESG 20 fund has returned 6.4% last year.
And that's versus the index at 6.3%.
And the fixed ESG 80 fund has returned 21.7% versus the index of 21.4%.
So the funds are tracking the indexes very closely, which is exactly what we would expect.

00:03:14:18 - 00:03:16:18
Yeah, I think that's a really, really important point and not something to be walked by:
there are set markets or indexes that these are actually tracking, and they're doing exactly what they should be doing on the tin.
So again, from a saver’s perspective,it's a brilliant message to be able to get across and a real certainty and comfort that it gives to people.

00:03:31:18 - 00:03:34:18
But the My Future strategies are only some of the funds that are availableor some of the strategies on our master trust.
Can you talk us through some of the other popular funds that are available across the master trusts?

00:03:42:16 - 00:03:46:04
Yes, you're correct that most scheme members the default is suitable for them, but there are some individuals that maybe want to either invest their regular contributions or their additional voluntary contributions in some of the other funds that we have available.
So we've seen very strong flows into the fixed ESG funds also on a standalone basis.
So for example, into the fixed ESG 60 fund.
And we've also seen very strong flows into the Passive Plus fund range, which again is performing in line with our expectations.

Perfect. Thanks, Amber.
So, look, I think the big takeaway for me in all of this is that the My Future strategies,which are designed to manage people's money throughout their pre-retirement savings life cycle, are doing exactly what they should be doing and are the right choice, depending on how you're planning on taking your benefits.
However, if you want a little bit more of a hands-on approach to how your money is managed, there are a range of other funds out there for you.
As always, when you're making your investment decision about where to place your pension, we would definitely recommend that you talk to the scheme's financial broker, and if you're not sure who that is, your employer will be able to provide the details.

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Thanks for watching
and thanks for your time.