Phoenix CIS has supported TPT Retirement Solutions to launch its new decumulation offering for DC Master Trust members, providing them with a Managed Income for Life (to age 95) that mitigates many of the key risks they face in retirement.
Read our latest case study to find out more.
_________________________________________________________
Background
While pension freedoms have given DC members unprecedented flexibility and control over how they access their savings, individuals now face complex decisions around how they manage the pot they’ve accumulated to generate a reliable and sustainable income in retirement.
Recognising the scale of the challenge, TPT has designed a new default DC decumulation proposition that will enable members to transition seamlessly into income drawdown with only minimal decision-making required. The strategy aims to mitigate the key risks that DC members face in retirement - namely sustainability, inflation, investment and longevity risks – with asset allocation and income payout rates managed on behalf of the member to target a sustainable income across the rest of their retirement.
With a clear vision for its new decumulation offering, TPT approached Phoenix CIS, as their investment platform provider, to move from concept to implementation and deliver the changes required.
_________________________________________________________
Challenge
TPT’s ‘Managed Income for Life’ solution involved changes to its default Target Date Fund (TDF) investment strategy, in order to keep savings invested and growing while also generating an income for members. We had to achieve this without transferring funds off the platform or to a separate drawdown provider.
The solution is part of TPT’s wider DC digitisation programme, which is transforming the member experience to provide a seamless journey throughout accumulation and into the decumulation phase of the savings cycle. It was therefore important that we could support large-scale change to execute this vision.
_________________________________________________________
Solution
Working closely with TPT and other key stakeholders, we implemented a number of changes on the platform to ensure their new default decumulation offering could be made available to members.
-
Launching income-paying TDFs
The first step was to launch income-paying Target Date Funds to enable income drawdown. We worked closely with TPT’s investment manager AllianceBernstein, who designed the to- and through TDF strategy, to onboard the funds onto our platform. We then established a brand-new set of operational processes so that income could be paid out of the fund and to the member on a monthly basis.
-
Supporting system integration
To ensure a seamless member experience, we undertook a rigorous 12-month programme of system testing to ensure platform readiness and operational resilience. We also worked closely with the administrator to support their integration with our operational systems. This included in-depth walkthroughs of key processes, collaborative problem-solving and continuous knowledge sharing – ensuring alignment across our systems and a consistent, high-quality experience for members.
_________________________________________________________
Results
Working closely with TPT, AllianceBernstein and the administrator, we delivered all aspects of the project to agreed timelines, with a clear focus on minimising disruption to members as far as possible during this period of transition.
As a result of the changes we implemented, DC members can now access TPT’s Managed Income for Life solution, which provides the following benefits:
- A seamless transition into retirement, where they remain invested in the same sophisticated default investment strategy while receiving a regular income.
- Income payout levels are managed on members’ behalf and reviewed annually to ensure they remain sustainable.
- TPT’s default investment strategy aims to deliver a retirement income that can maintain its real value to mitigate inflation risk. It also has investment diversification built in to guard against market volatility.
- Members have the option to convert remaining savings into a guaranteed annuity between ages 75 and 80, when they can achieve a higher income per pound invested or receive income for life (to age 95). They are also free to transfer to a different regular flexi-access drawdown product at any time, if they want greater flexibility over how they access their savings, and dip into their drawdown to make withdrawals from their managed income.
Through close collaboration and a flexible, future-ready platform, we’ve empowered TPT to deliver an innovative retirement solution that meets the needs of its members — supporting better outcomes both now and in the future.
_________________________________________________________
“Delivering our Managed Income for Life solution was a major undertaking involving significant change – and Phoenix CIS was with us every step of the way!
“Their flexibility, commitment, and deep understanding of our needs made them an invaluable partner. They went above and beyond to ensure changes were delivered smoothly through their investment platform and played a crucial role in making this transformation a reality for members.”
Georgie Edwards, DC Proposition Associate Director, TPT Retirement Solutions
_________________________________________________________
“Our longstanding partnership with TPT and Phoenix CIS extends back to the start of auto-enrolment and is based on a shared mission to be with members for the entire journey – to retirement and beyond.
“TPT’s Managed Income for Life Solution leverages AB’s proven retirement income solutions, founded on robust investment and member research”
David Hutchins, Portfolio Manager, AllianceBernstein Ltd
_________________________________________________________
“We were proud to support TPT to deliver their Managed Income for Life default decumulation offering, which simplifies income drawdown while providing both certainty and flexibility for members in retirement.
“At Phoenix CIS, we partner with our clients for the long-term to face challenges head on and respond with forward-thinking solutions. It’s only by working collaboratively and combining our expertise that we’ll succeed in delivering the innovation that ultimately leads to better long-term outcomes for members.”
Jess Williams, Head of Corporate Investment Services, Phoenix CIS