Continuing to invest after the retirement date
At BeFrank, employees can opt to continue investing part of their pension capital after their retirement date while they are still accruing pension. This page explains how it works.
If your employee continues to invest after they have reached their retirement date, they could get a higher pension. It also makes their pension benefits less dependent on market interest rates at one point in time. This is achieved through variable pension benefits.
Risk reduction
Within our current lifecycles, we adjust the employee’s risk reduction as they reach their retirement date. This can be achieved in five different ways:
1. Not continuing to invest after the retirement date (very defensive)
This lifecycle will fully eliminate the proportion of marketable securities until one year before the retirement date.
2. Continuing defensive investment after the retirement date
If an employee chooses this option, the lifecycle will reduce the proportion of marketable securities to 15% on the retirement date.
3. Continuing neutral investment after the retirement date
In this lifecycle, we will reduce the proportion of marketable securities to 30% on the retirement date.
4. Continuing offensive investment after the retirement date
If an employee chooses this lifecycle, we will reduce the proportion of marketable securities to 45% on the retirement date.
5. Continuing very offensive investment after the retirement date
In this lifecycle, we will reduce the proportion of marketable securities to 60% on the retirement date.
Want to find out more? Read our page on investing in lifecycles.
Making choices in good time
Under the Pensions Act. Your customer’s employees can decide to continue investing part or all of their pension capital at any time. We always recommend making choices in good time, and in any case before the start date of risk reduction in the lifecycle. From that point on, the phased risk reduction will change.
It is also a good idea for young employees to look into continued investment, as it increases their chance of a higher pension.
Under the Future of Pensions Act. If the employer uses a pension scheme under the Future of Pensions Act, the contract may stipulate in advance whether employees are allowed to continue to invest.
Buying a pension
When an employee reaches their retirement date, they will purchase pension benefits from a provider of their choice. This means that BeFrank does not actually pay out their pension.
Supporting employees
What is the best decision that your employee can make? To find out, they need to fill in the Profile Selector on their personal pension page. We have expanded the Profile Selector so that it includes questions on risk appetite after their retirement date. It therefore generates a risk profile for their pension accrual, a risk profile for their retirement and the lifecycle that best aligns with their situation.
Employees can use the income planner to view the implications of continued investment in a few simple steps. They can immediately see how continued investing will affect their expected pension.
If an employee wants to continue investing, they can notify us of this online. They can change their mind about their decision at any time.
We keep employees informed
If an employee is accruing pension with BeFrank, we tell them about the option to continue investing. We will also encourage them to log into their personal pension page on a regular basis and fill in their Profile Selector.
We will send them a message just before we start reducing their risk and again before they retire. That way, they know where they stand prior to their retirement.