Your Match Plan switch questions, answered

Clare Reilly

by , Chief Engagement Officer

at PensionBee

21 Oct 2021 /  

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Why are you closing the Match Plan?

Our decision to close the plan was predominantly based on a value for money analysis by our Investment Committee.

Why did you select the Tailored Plan as an alternative?

We selected this plan for a few reasons:

When we compare the construction of the Tailored Plan to the Match Plan, we believe it offers better inbuilt consumer protections over prolonged periods of saving, through its de-risking glidepath and increased number of asset classes.

The more sophisticated investment approach of the Tailored Plan is reflected in its historical performance in 2020, a year of great market turbulence. Past performance is not an indicator of future performance.

As a flagship BlackRock product it has a dedicated team of investment experts adjusting the ratio of the twelve asset classes as market conditions change. If there should be a future downturn of one asset class, such as emerging market equities, the Tailored Plan is set up to respond with greater allocation to the other eleven classes.

The Tailored Plan is screened for undesirable characteristics such as manufacturers of controversial weapons, thermal coal, tobacco, UN Global Compact violators and weapons. These screens have been implemented to protect savers from negative performance risks in these sectors. The direction of screening is that additional sectors and criteria will be added over time, as material risk factors and customer demand increases. The Match Plan cannot be screened for any of these sectors, nor can it be in the future, due to its legacy fund construction.

How does Match Plan performance compare to the Tailored Plan?

There are eight versions, or vintages, of the Tailored Plan based on your date of birth. You will be switched into a version based on your age. You can use the table below to see the past performance of the Match Plan compared to each vintage of the Tailored Plan. Past performance is not an indicator of future performance.

Year of birth Match Plan 2020 performance 5 yr performance
All years Match Plan factsheet 4.29% 7.81%
Year of birth Your Tailored vintage 2020 performance 5 yr performance
In or before 1959 Tailored 2019 - 21 8.59% 6.92%
1960 - 65 Tailored 2025 - 27 8.66% 7.97%
1966 - 71 Tailored 2031 - 33 8.55% 8.91%
1972 - 77 Tailored 2037 - 39 8.58% 9.89%
1978 - 83 Tailored 2043 - 45 8.40% 10.76%
1984 - 89 Tailored 2049 - 51 8.38% 11.34%
1990 - 1995 Tailored 2055 - 57 8.45% 11.46%
After 1995 Tailored 2061 - 63 8.45% 11.45%

What are the fees of the Tailored Plan?

The Tailored Plan costs 0.70% annually. This is 0.10% more than the Match Plan but we believe the higher cost is justified by the product construction and research focus on optimising the Tailored Plan’s glidepath. This is the sequence of de-risking that takes place over time and responds to changes in market conditions.

Customers who do not wish to switch to a higher charging plan can make an active choice to move to our lower charging Tracker Plan. The Tracker Plan is priced at 0.50% and is managed by State Street Global Advisors. It offers 80% exposure to equities and 20% exposure to fixed income. This plan also has some ESG screens.

If you have >£100K in your pot, your fee will continue to halve on the portion above this in all PensionBee plans.

What are the costs of switching?

As BlackRock manages both the Match Plan and the Tailored Plans, we will instruct them to conduct an intra-day bulk switch on their investment platform. This means they will place a buy and a sell order at the same time and the assets should switch across to the new plan.

BlackRock estimates that transaction costs of switching from one plan to another, which will range from 0.20% - 0.24% based on your vintage. So the cost for customers by vintage, based on an average pot size of £20K, are below.

Year of birth Your Tailored vintage Switching cost % Cost for a £20K pot
In or before 1959 Tailored 2019 - 21 0.20% £40.00
1960 - 65 Tailored 2025 - 27 0.21% £42.00
1966 - 71 Tailored 2031 - 33 0.22% £44.00
1972 - 77 Tailored 2037 - 39 0.22% £44.00
1978 - 83 Tailored 2043 - 45 0.22% £44.00
1984 - 89 Tailored 2049 - 51 0.23% £46.00
1990 - 1995 Tailored 2055 - 57 0.24% £48.00
After 1995 Tailored 2061 - 63 0.21% £42.00

What are the risks of switching?

Funds will be moved on the same day to minimise market movement risks. This is different from a regular plan switch, which involves the disinvestment and reinvestment of cash and funds being out of the market. This can also take up to 10 working days.

Plan switches are a business-as-usual activity for BlackRock, who are the world’s largest asset manager.

Whilst there is no out of market risk, the usual market fluctuations may impact your balance in the new fund

What if I don’t want to be switched to the Tailored Plan. What are my options?

If you do not want to be automatically switched into the Tailored Plan, you have at least 30 working days to make an active decision to switch into one of our other plans. We have seven other plans available, ranging in fees from 0.50 - 0.95%.

Please log into your Beehive to switch plans.

With PensionBee you can switch to any new plan of your choice at any time. This switch will take around 10 working days to complete.

Can I continue to make contributions?

All your regular and ad hoc contributions will continue to be paid into your Match Plan until your switch begins. Once the switch begins your Beehive balance will be frozen until it completes. We estimate this will be for 5 working days.

We will give you a week’s notice before the switch begins, so you have advance warning to make contributions before or after this happens.

What if I plan to withdraw funds at this time?

Once the switch begins your Beehive balance will be frozen until it completes. We estimate this will be for 5 working days. You will not be able to withdraw funds at this time.

We will give you a week’s notice before the switch begins, so you have advance warning to make any necessary withdrawals.

What if the stock market is volatile in the next month, will you still switch me?

We’re aiming for the switching process to be seamless for customers and will continue to work closely with BlackRock to ensure that. If there was extreme market turbulence (which we would define as the market moving >10% in one day) in the run up to the fund switch date we would review the timeline and notify customers of any changes.

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