At BeFrank, we invest your pension contribution in a lifecycle. That means we match the investments to your age. Our goal is to create the perfect balance between risk, return and sustainability. We explain how we go about that below.
How a lifecycle works
If you’re young, we want to get a lot of return from your investments. We will invest with slightly more risk. The closer you come to your retirement age, the less risk we take when we invest.
Less investment risk
We gradually convert riskier investments into lower-risk investments. We do that because the older you get, the less time there is to recover from potential setbacks.
Less interest rate risk
We also reduce the interest rate risk: the risk that your pension will fall as interest rates fall.
This way, we make sure your pension depends less on developments in the stock market and the interest rate on your retirement date.
We keep an eye on the lifecycles
At BeFrank, we believe in returns if possible and certainty if required. Our specialists therefore keep a close eye on lifecycles. Is an investment fund is not doing so well in the stock market, we will replace the fund. You don’t have to do anything yourself.
We spread out investments
We believe it is important to spread investment risks. That is why we invest your pension capital in different investment categories and funds. This ensures a good mix of investments. If one investment is temporarily a little lower in value, another investment can make up for that shortfall.
We invest sustainably
You can rest assured that we will invest your pension capital as fairly as possible. We invest in businesses that treat people and the environment with respect.
Making your own choices about your lifecycle
At BeFrank, we invest your pension contribution according to a standard risk profile. Your employer selects that profile for you and you decide whether it suits you or whether you want to change it. After all, it’s your future that’s at stake.
If you want to change your risk profile or investment type, you can inform us quickly and easily through your personal pension page.
Reducing the risks
You also have a say when it comes to reducing your investment risk. You could choose to reduce the risk earlier or later, for example. These are your options:
> Choosing your retirement age
By default, we reduce risky investments until your expected State Pension Age. You can change this. You could, for example, select your retirement age as the final age in your pension scheme, or another milestone. Find out how to set your retirement age.
> Choosing your reduction rate
We will reduce your investment risk gradually where possible, so that when you are older, you are taking as little risk with your investments as possible. If you want to, you can choose how much to reduce your investment risk – by 15%, 30%, 45% or 60%, for example.
Why you would do that? The longer we continue investing with more risk, the more likely your pension capital is to grow. However, bear in mind that your investment results may fall.
We improve our investments when necessary
Each year, we assess whether we need to improve our investment policy. The market could be changing in anticipation of new legislation, for example, or we might expect higher or lower returns or investment risk.
By keeping a close eye on all of these factors, we ensure the best pension outcome.