The RSP Lifestyle has three different pre-retirement investment pathways: “Cash Lump Sum”, “Annuity” and “Stay Invested”, which reflect the differing nature of options available.
The Cash Lump Sum Pathway moves the account out of growth-seeking assets into a very low volatility cash fund, for those members who intend to take their RSP pot in a lump sum payment (which can be paid in one go or over two tax years). One quarter of the lump sum would be tax-free and the remainder taxed at the member’s marginal rate in that tax year.
The Annuity Pathway gradually moves the account to be 25% invested in cash funds and 75% invested in the IMI Retirement Fund for those members thinking of taking the maximum amount of tax-free cash (25%) and the remainder as an annuity.
The Stay Invested Pathway creates a blended portfolio with a mix of global equities, the diversified asset fund and the IMI Retirement fund to continue to offer growth potential but with some protection against moves in annuity pricing. This option is for those who wish to utilise the IMI Drawdown by taking their retirement pot over a period of time or for those who remain flexible regarding the date of their retirement.
This is the default option in the RSP Lifestyle unless members select another pathway.