Investment Q&A

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The Trustees have reviewed the defined contribution (DC) investment options and you were given the opportunity to feed into that review. After some simple questions, you told us what you think/already know about your DC pension investments. The main highlights were:

  • 80% didn’t know what type of investment fund(s) their Member Accounts were invested in
  • 85% didn’t know what investment options were available
  • 77% didn’t know where to find more information about the available investment options

To help, we’ve put together an investment Q&A to answer some of the common questions we received. You can also view the Investment Guide at:

Where am I invested?

You can find out which funds you are invested in by:

  • logging onto your online account at (click on ‘Log in to Hartlink Online’)
  • checking your annual benefit statement which will show the value of your Account and which funds you are invested in.  It also includes a projection of the benefits that may be available at your chosen Normal Retirement Date 

If you don’t make any investment choices, your Member Account will be invested in the Lifestyle Option. This is simply a ‘default’ strategy designed by the Trustees to meet the reasonable needs of most members that don’t make an investment choice.  For further information please refer to the Investment guide at the link above.

What is an asset type/class?

There are three main asset classes to know about:

  • Equities
    These are also known as company shares and are bought and sold on the stock market. The value of a share is largely determined by the performance of the issuing company plus market conditions. Historically, equities have produced good returns in the long term – better than bonds or cash – but they can fall as well as rise in value, sometimes quite sharply.

  • Cash
    Cash funds invest in a variety of money market investments, as well as deposit accounts. Their aim is to produce, in total, interest-rate like returns. Cash investments provide a reasonable level of protection against your capital value reducing. However, in certain market conditions, investments in cash funds can fall in value.

  • Bonds
    Bonds are loans to organisations or governments. Corporate bonds are loans issued by public companies. Bonds issued by the UK government are also called gilts. Bonds provide investment returns either at a fixed rate (fixed interest), or at a rate that is linked to inflation. They are traded in a similar way to shares so their value rises and falls, but not usually as sharply as the value of shares. Bonds generally provide returns over the long term that are expected to be lower than equities but higher than cash.
What is a fund charge?

Different types of investment come with different costs and charges, known as the Fund Charge or Annual Management Charge (AMC).

Fund charges are automatically applied by the fund manager. To find out the costs, you can view your Investment Guide on the website at:

What do I need to know about investment risk?

Risk is a fundamental factor to consider when investing money. It’s important to remember that risk and reward are interconnected - the greater the risk you take with your money, the bigger the potential reward and conversely, the safer the investment, the lower the return is likely to be.

Risk is generally split into three categories:

  • Low risk
    Investing your money in low risk funds may provide greater financial protection from volatility (riskiness) but it can also provide lower returns over the long term.

  • Medium risk
    Medium risk investors might be those starting to near retirement, somebody who has less time to invest or wants to take a smaller amount of risk. You would generally diversify their investments, i.e. shares, bonds, property and cash, while still trying to maximise returns.

  • High risk
    Money that is invested in high risk assets have the potential to produce higher investment returns over the longer term. But, they may lose value due to the volatility (riskiness) of the investment market. This means that they may be severely affected by market downturns and other factors.
What is a lifestyle option?

If you don’t feel comfortable making an active investment choice yourself, the Trustees have made available a range of pre-built investment strategies that automatically de-risk your savings as you approach retirement and you can find out what they are by viewing the Investment Guide at:

What does self-select mean?

This option allows you to take more control of your investments. There is no automatic switching and it’s your responsibility to select, review and move your investments as and when you think necessary.

You should be comfortable actively managing your investments or have an adviser that can help you manage your investments. You can see what the self-select options are by visiting the Investment Guide at:

What are the risks of investing?

There are different types of risks associated with investing DC pension funds. Some of the main ones that you should consider are described below.

  • Capital value risk
    This is the risk that the value of your investments may fall. Some funds experience more rapid price movements than other funds. In the past, the riskier assets classes such as equities (company shares) have typically offered greater rewards in the long term than the less risky asset classes such as cash. It is important to manage the capital value risk as you approach retirement to avoid the value of your Member Account falling just before you take your benefits. The younger you are, the less concerned you should be with short term risk. Instead you should be seeking strong long-term investment growth.

  • Opportunity risk
    This is the risk that your Member Account is invested in a way that has less potential to achieve the growth that you need to provide sufficient funds for your retirement. For example, if you choose to invest your Member Account in options that comprise relatively low levels of investment risk over a long timeframe. Investments such as bonds, gilts and particularly cash are less likely to achieve significant levels of growth over the long term, although they are usually considered safer investments in the shorter term.

  • Inflation risk
    This is the risk that a fund loses ‘real value’ because its returns are lower than the increase in the cost of living. This can happen with very low-risk funds – like cash – which aim to provide security for savings, so is often used when very close to retirement.

  • Conversion risk
    This risk applies in particular if you are planning to use your fund to buy an annuity (a guaranteed income for life). Annuity rates change in line with economic conditions, broadly along the same lines as bond values change. This is why it is common to invest in bonds or gilts in the approach to retirement if you want to use your Member Account to provide a guaranteed income, as the value of the amount you invest in them should rise and fall in line with the cost of buying it.

  • Diversity risk
    This is the risk of your Member Account losing value because you have invested it in one or two asset classes. Meaning that when one underperforms they all underperform. One way to manage risk is to invest savings across funds with a range of assets, or in different locations – so if a particular market or region has a bad patch, it need not affect a large part of your Member Account. The Lifestyle options aim to do this on your behalf, or you can do this by spreading your Member Account across a mix of different funds.
Can I invest based on types of indistry e.g. environment, ethical etc?

Not at the moment, but these types of fund may become available in the future. You can check the latest list of self-select funds using the Investment Guide at:

Can I invest money into the Scheme?

No - this is a closed Scheme.

What investment options are available for the Scheme?

You can refer to the Investment Guide for the latest list at:

Remember - neither the Trustees nor the Company can give you advice on choosing your investments. If you are uncertain about your investment choice, you should speak to an independent financial adviser and you can find further information at: