The investment options for members of the DSL Plan are changing

Chair of the Trustee Board Video

Hello, I’m Robert Tickell, Chair of the Trustee for the IBM Pension Plans and I’d like to tell you about some changes the Trustee is making to your investment options.

Part of the Trustee’s role is to deliver a pension plan that offers value for money and provides investment options aligned with the retirement preferences of most members.

Following an extensive review of our membership, advice from our investment advisers, and member feedback, the Trustee is making some key changes to the Lifecycle strategies as well as updating the Freestyle fund range.

So, if you are invested in a Lifecycle 2020 strategy, these will close in July, and you will be moving to newly created Lifecycle strategies. These new Lifecycle strategies seek to place greater emphasis on generating long-term investment returns and align more closely with how the Trustee anticipates most members will draw on their pension savings at retirement.

The Trustee will also be updating the self-select Freestyle fund range by closing down some existing funds and introducing some new Freestyle fund options. The new range provides a broader selection of asset classes whilst also streamlining options to simplify and support members in making investment choices.

So, If you are currently invested in one of the Freestyle funds which are due to close in July, your investments will also move to an alternative Freestyle fund.

There’s a dedicated webpage where you can find out more information about the changes and where you can get answers to some commonly asked questions and of course also where you can send in any queries that you may have.

What next? Well, first, I’d encourage you to check where you’re currently invested, as well as your target retirement age. To do this, please log into Manage Your Account either on a computer or via L&G’s mobile app.

Secondly, find out how the changes the Trustee is making will impact you – this is all covered in the dedicated website, alongside details about how to seek independent financial advice should you want it.

Thank you very much for listening.

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From July 2025, the Trustee is changing the default investment strategy for DSL Plan members. DSL Plan members will move from the Lifecycle Balanced 2020 Strategy (DSL) to the new Lifecycle to Drawdown Strategy (DSL).

Please note the Lifecycle Balanced 2020 Strategy (DSL) will close and you cannot remain invested in this fund.

Members invested in either the Lifecycle to Drawdown 2020, Lifecycle to Annuity 2020 or Lifecycle to Lump Sum 2020 strategies will be moved to the new equivalent Lifecycle strategies: Lifecycle to Drawdown, Lifecycle to Annuity and Lifecycle to Lump Sum.  For example, if a member is invested in the Lifecycle to Lump Sum 2020 Strategy, their investments will therefore move to the new Lifecycle to Lump Sum Strategy. Please note the Lifecycle 2020 Strategies are closing and you cannot remain invested in these funds.

You can make an alternative investment choice until 27 June 2025.

Further details on the Lifecycle strategies changes and charges are as follows:

(*) Investment Management charges (IMCs) refer to ongoing annual charges paid to the investment manager for managing the fund. They are charged as a percentage of assets and reflected in the unit price of the fund.

Members invested in the above Lifecycle 2020 strategies are estimated to incur transaction costs up to 0.18% as a result of the changes being made.

Please note that all investments carry a risk that they might fall in value. Past performance of an investment is no indicator or guarantee of future performance.

If you’re comfortable with the changes, you don’t need to do anything. If you wish to make an alternative choice, you have until 27 June 2025 to do so.

We will be closing eleven Freestyle funds and replacing them with some existing and some new Freestyle funds. The eleven Freestyle funds are closing, and you cannot remain invested in these funds. If you are invested in these funds, your investments will be moved to a replacement Freestyle fund as set out in the table below, unless you make an alternative choice.

Additionally, the Growth Fund – an underlying component within both the Lifecycle to Drawdown and Lifecycle to Lump Sum strategies – will transition to an evolving asset allocation approach to capitalise on market opportunities where possible. You can find out about the new investment objective for the Growth Fund in the Future World Multi-Asset Fund documentOpens in new tab. Accordingly, the Investment Management Charge for the Growth Fund will increase from 0.14% to 0.16% per annum.

The new Freestyle funds are the Future World North America Equity Index Fund, the Future World USD Corporate Bond Index Fund and the HSBC Sukuk Fund. 

Further details on the Freestyle fund changes and charges are as follows:

(*) Investment Management charges (IMCs) refer to ongoing annual charges paid to the investment manager for managing the fund. They are charged as a percentage of assets and reflected in the unit price of the fund. The IMCs displayed in fund factsheets will not be updated until July, so please refer to the IMCs listed above until that time.

Four new Freestyle funds are being launched in April 2025 to provide members with a broader range of investment options. Find out more about the new funds we are launching in the table below.

(*) Investment Management charges (IMCs) refer to ongoing annual charges paid to the investment manager for managing the fund. They are charged as a percentage of assets and reflected in the unit price of the fund.

You can find out more in our Investment Guide which will cover the fund objective, benchmark, asset allocation, risk rating and fund charges for each of the new funds.

If you are currently invested in one of the Lifecycle 2020 strategies set for closure and you will reach your target retirement age (TRA) by 1 July 2025, these changes will impact you differently. Your pension savings will no longer be invested in a Lifecycle strategy but will remain in the same fund allocation as at the point you reached your TRA.

If you have not selected a TRA, your TRA will be your normal retirement age (NRA). You can check your NRA by looking in the "Information factsheets" section of the Plan website’s document libraryOpens in new tab. You can also check by logging on to your online account at legalandgeneral.com/myaOpens in new tab or downloading the L&G app by searching 'Legal & General' in the App Store or Google Play. Alternatively, you can also visit the IBM Plan websiteOpens in new tab and select 'Manage Your Account' from the top menu.

All members invested in the closing Freestyle funds will be moved to replacement Freestyle funds. This is the case even if you have reached your TRA.

There is a transaction cost involved with making any fund switch. This will not be shown on your annual benefit statement, but it’s reflected in the unit prices used to calculate the value of your pension savings. Please be assured that the Trustee has considered this cost as part of the overall assessment of the changes being made to the investment range and has worked hard to secure members competitive fees, offering a cost-effective solution for your pension savings.

For more information, view Legal & General’s guide on transaction costsOpens in new tab.

The change in ongoing charges will depend on the specific Lifecycle strategy you are invested in and the proximity to your selected retirement age. If you decide to ‘Freestyle’ then the fund charges for your chosen funds will apply. Information about the charges that apply to the funds is set out in the investment guideOpens in new tab.

If you would like financial advice, you can access Legal & General’s financial support (LGFA) service. LGFA is available for IBM members, find out more about the serviceOpens in new tab.

You can also find a list of regulated financial advisers on the MoneyHelperOpens in new tab website. Please be aware that all advisers usually charge a fee for their services. 

If you’re comfortable with these changes, you don’t need to do anything.

However, if you wish to make an alternative investment choice, you have until 27 June 2025 to do so before the changes take effect.

For those impacted by the investment changes, there will be up to two blackout periods when the changes will take place; these will be on 1 to 3 July 2025 and again on 15 to 17 July 2025.

Find out more about the two blackouts in the Frequently Asked QuestionsOpens in new tab.

During a blackout period, you won’t be able to:

• Make changes to how your pension savings are invested
• Withdraw your pension savings
• Change your nominated target retirement age (TRA)
• Transfer out of the pension plan
• Make or change your additional voluntary contributions

So please ensure you plan accordingly. You can resume activities associated with your pension savings outside these blackout periods.

You can do this by logging into your accountOpens in new tab, the L&G app or by calling the Legal & General member helpline on 0345 675 0017Opens in new tab.