15th June 2021
THE GSK PENSION PLANS (‘THE PLANS’) – CHANGES TO THE DEFAULT INVESTMENT STRATEGY, THE GSK GLOBAL EQUITY FUND AND INTRODUCTION OF THE GSK GLOBAL SUSTAINABLE EQUITY FUND
The GSK pension plans (‘the Plans’) – Changes to the Default Investment Strategy, the GSK Global Equity Fund and introduction of the GSK Global Sustainable Equity Fund
Following a review of the DC/AVC investment options offered to members in the GSK pension plans, we are making some changes to the current DC investment options from 15 July 2021.
Default Investment Strategy. The Plans’ default lifestyle strategy will switch from the current strategy which targets the purchase of an annuity at retirement (GSK Lifecycle Pension Option), to one which targets income drawdown (GSK Lifecycle Drawdown Option).
GSK Global Equity Fund. The GSK Global Equity Fund will change to have a 50% allocation to Legal and General’s Future World funds, which incorporate sustainable investment factors into the investment strategy.
GSK Global Sustainable Equity Fund. This new Freestyle fund will have a 100% allocation to Legal and General’s Future World funds, which incorporate sustainable investment factors into the investment strategy.
Why are we making these changes?
The Trustee decided to make these changes after taking into consideration factors such as:
Members’ experience of the GSK pension plans, including changes in savings and retirement income habits
Wider market data of other pension schemes
The choice of appropriate DC sustainable investment funds
What do I need to do?
You may wish to review your existing investments and contributions to the Plans to ensure they remain in line with your intended actions in retirement, but you do not need to take any action.
If you are invested in the default investment strategy and within 5 years of retirement, we have already written to you with details of how these changes affect you and what action you may wish to consider taking.
Where can I get further information?
Further information about the new default investment strategy or Legal and General’s Future World funds can be found here.
Further information on the other investment options available to you is available here.
In order to make the changes described in this communication, a “blackout period” is required. This is a period of time during which you will not be able to make any changes or switches to your DC/AVC savings.
The blackout period is between 30 June 2021 and 14 July 2021 (inclusive), which means no fund switches, transfers-out or retirements can be processed during this time.
If you have any questions or require any further information, please contact the GSK Pension Plan helpline on 01737 227563 or email at GSKpensions@willistowerswatson.com
The Trustee of the GSK pension plans
What is a 'Drawdown' fund?
What are the Legal and General’s Future World funds?
What are sustainable investment factors?
Income drawdown is a way of getting pension income when you retire while allowing your pension fund to remain invested in the market with the potential to keep on growing. Instead of using all the money in your pension fund to buy an annuity (a guaranteed pension for life), you leave your money invested and take a regular income direct from the fund.
The Future World funds focus on sustainable investing, including Environmental, Social and Governance factors (“ESG”) when selecting which companies to invest in.
The funds favours companies which exhibit characteristics that have historically led to higher returns or lower risk than the market as a whole, and companies which are less carbon-intensive in particular.
Companies will be assessed by Legal and General for robustness of their strategies, governance and transparency via Legal and General’s Climate Impact Pledge.
Companies that fail to meet Legal and General’s minimum standards in low carbon transition and corporate governance standards may be excluded from the funds.
The funds will also exclude shares issued by manufacturers of controversial weapons.
Sustainable investment funds choose companies who they consider perform well in the following three areas:
Environmental – e.g. climate change, energy efficiency and reduction of emissions, conservation, waste and pollution, water and resource scarcity.
Social – e.g. health and safety, stakeholder concerns, demographics, modern day slavery, controversial weapons, relationships with employees, suppliers, customers and the local community.
(Corporate) Governance – e.g. Board structure, leadership, executive pay and remuneration, audit quality, and shareholder rights and voting.