Vanguard index pension plan offers investors an active role

Eric Smith

Vanguard Investments Australia has launched a pension product that allows investors to build an individual investment portfolio to match their personal risk profile.

The Vanguard Personal Pension Plan offers investors a choice of six asset sector investment options and four pre-mixed diversified options, all of them following an index investment strategy.

It provides investors with the “tax-efficiency and flexibility of an account-based pension and the long-term benefits and low costs of an index investment approach”, according to chief investment officer Eric Smith.

He said investors can build their own individual portfolio using the sector funds or opt for a diversified option that matches their personal risk profile — be that conservative, balanced, growth or high growth.

“There is also the additional benefit that the asset allocation is monitored and rebalanced regularly to ensure it remains within the ranges that have been set.”

The plan gives investors access to an account-based pension that provides a number of benefits, including a regular income or lump sums until the account balance is paid out, he said.

Investors can also choose how much is paid out and the frequency of payments, and no limits on how much the investor can receive as a pension each year.