Retirement BridgeSM: Choice, Flexibility and Freedom

Retirement Bridge gives scheme members a seamless path through their entire savings journey from accumulation into decumulation, keeping their options open at every stage.

What Is Retirement Bridge?

Retirement Bridge (RB) is an age-based, low-cost income drawdown solution. Available to people aged 55 to 75 regardless of the amount of their pension savings, it’s set up as a series of age-based income-paying accounts. 

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*We have referred to funds on this website for ease of reference.

How Do We Manage the Funds?

Investors choose the Retirement Bridge Fund that corresponds to their year of birth – for example the “Retirement Bridge Fund 1959”.

The funds are multi-asset portfolios, combining a mix of equities, bonds, property and cash securities. The need to pay an income does not restrict our choice of investments, but our asset allocation is guided by the age-related risk profile of investors in each fund.

In broad terms, the highest portion of equities is 40% (with 60% in protection assets such as bonds) at age 55. The equity component reduces by 2% each year from age 65 to 75. In addition, the fund managers take account of the potential of additional growth in retirement, while still providing a sustainable level of income. 

What Does Retirement Bridge Aim To Achieve?

Based on our research, for a member retiring at age 65, we aim to increase the total income payout by age 75 to more than 20% above that of a traditional non-escalating joint-life annuity.*

Provide A Sustainable Yet Growing Income

Retirement Bridge aims to initially provide a sustainable level of income—similar to that of a typical joint-life level annuity, but one that is expected to grow over time.* While we look to maximise the potential annual income from the fund, we seek to minimise the risk that income will fall in any one year.

Protect Your Income Purchasing Power

Retirement Bridge aims to provide protection against significant inflation for the purchasing power of members’ income.

Provide Flexibility For Members

We adapt our investment and payout strategy as members get older and according to market conditions. Members also keep control of their money for longer and can decide what they do with it: keep their assets invested, exit at any time without financial penalty, and choose how the remaining funds are used in the event of death.

Get Value Of Money

Our single-pricing structure, no exit penalties and low-cost fund management charge ensure the members receive value for money.

*Source: AB, March 2012. Benchmarked against an annuity for a 65-year-old couple at outset. Simulation covers every rolling 10-year period from 1920 to 2012. Retirement Bridge assumes simple equity and bond strategy using our Dynamic Asset Allocation approach after 1 January 1970. Annuity assumes purchase of level joint-life contract, with rates calculated using prevailing market conditions at the time and 2012 mortality tables but with allowance for underpricing of longevity improvements, particularly in the period 2000–2003. Based on simulated returns which are based on a number of assumptions, the projected income levels are not guaranteed. For full details, see our white paper: Retirement Bridge, Providing a Real Choice for Retirees.

AB as at 31 December 2020 unless otherwise stated.

Past performance is no guide to future performance. The value of investments and the income from them can fall as well as rise and you may get back less than originally invested.

Related Resources

Flexible DC Solutions
Managing To Your Objectives
AB Target Date Funds Mission and Purpose
Making Target Date Funds Work For You