Your Annual Benefit Statement Review
There are two things that significantly impact your MMT pension: contributions going in, and the overall investment performance.
Mercer has reported that investment funds have generally performed positively over the past 12 months.
Your pension is more than likely to be the longest (and biggest!) investment you’ll make in your life. This means that you have plenty of time to let any short-term dips recover.
Every payment you and IMI make into your pension is invested into an investment fund (or funds) that you have selected. If you haven’t chosen your own investments, then your pension will have been automatically invested into the default option. This is called Mercer Smart Path.
Mercer Smart Path has been designed to automatically adjust the level of risk as you get closer to retirement age.
If you’d like to choose your own investments, you can do this via Mercer Money.
Each fund is made up of a wide variety of different investments – this is to limit risk and to give your retirement savings the biggest possible chance to grow.
What’s happening with markets at the moment?
Right now, the main impact on your pension is inflation. When the investment market is seeing a fall, one of the worst things you can do is to try to access or move your money. All this means is you are selling your investments at a loss, rather than giving them time to recover. Over time, any widespread drops should correct themselves as financial markets recover.
If you’ve chosen your own investments (self-selected), then it’s important to regularly check on them to make sure they’re performing as well as they can be.
You may also be concerned that your money has been invested in Russia. Mercer says that they are complying with any EU and UN sanctions related to the conflict.
Close to retirement? What should you do?
If you are close to retirement and have seen the value of your pension drop, you may want to consider delaying your retirement. If you have access to other savings, you might want to consider using these before accessing your pension.
If you are set on retiring and need to access your pension, you still have options available to ensure you realise your retirement dream. Income drawdown could give you the flexibility you need to keep your pension savings invested while you draw an income from your pension as and when you need it. It’s important to consider that taking big withdrawals when the value of your pension fund has fallen should generally be avoided, because leaving your pension money invested will give your pension chance to recover.
Before making any decisions about your pension, it is recommended you take financial advice. You can find a qualified independent financial adviser at Money Helper.
Responsible investment is a term used for when an investment manager is taking environmental, social and corporate governance issues (ESGs) into consideration when choosing where to invest money.
Mercer has told us that the MMT trustees are targeting net zero absolute carbon emissions by 2050, with an aim to reduce relative emissions by 45% by 2030.
By signing up to Mercer Money, you can regularly review your pension and make any changes to your contributions or investment choices. You can also access a retirement calculator to estimate your retirement income from your pensions and model the different options for taking your money.
If you haven’t registered for Mercer Money yet, you can do this by using your Pension Plan username and password – these will have been sent to you when you first joined the plan: mercermoney.com
If you have lost your username and password, call the Scottish Widows helpline on 0800 587 1912.
Free help and guidance
There’s lots of free help available with your pension. Money Helper – a government-backed service - offers free guidance and support with your pension and other money matters. You can find them at moneyhelper.org.uk
If you are aged 50 or over, you are entitled to a free review with Pension Wise, who can help you to make sense of your pension options. This is available through Money Helper.
Money Helper can also help you to find a qualified independent financial adviser.
If you’re aged 55 or over, you can use Mercer’s ‘Destination Retirement’ service. This service will help you to make a free plan, explore your options, and provide you with affordable financial advice.
Don’t forget to head to the IMI News section of the Pension City website – there’s lots of videos, articles and resources on there to help you get on board with your pension.