The Multi-fund Structure
Providing greater choice and control to contributors on how their pension funds are invested.
The Multi-fund Structure for RSA Funds was conceived by the National Pension Commission (PenCom) and implemented effective July 1, 2018, to align contributors’ risk appetite with their investment horizon, at every stage of their life cycle.
The Fund allocation was formerly RSA Active and RSA Retiree. With the introduction of the Multi-fund structure, the RSA Active became Fund II while RSA Retiree became Fund IV.
The Multi-fund Structure comprises Fund I, Fund II, Fund III and Fund IV (Retirees Fund); and the respective funds are distinguished by their overall exposure to variable income instruments and the age profile of the contributors.
By variable-income instruments, we refer to investments that provide the respective fund owners with a rate of return that is dynamic and determined by market forces.
Variable-income instruments provide investors with higher risk rewards.
- Achieve optimum returns for contributors by aligning their pension savings with their individual risk/return profile.
- Provide investment portfolio choices to contributors.
- Enhance the safety of pension assets through adequate portfolio diversification
- Provide greater choice and control to contributors on how their pension funds are invested.
- Increased investment in Alternative assets which will essentially protect against inflation and help to facilitate improved returns over the long term.
- Provide for investment strategies that will better diversify risk and sustain returns
- Membership of Fund I - Strictly by formal request of RSA holder.
- Membership of Fund II - Active Contributors who are less than 50 years.
- Membership of Fund III - Active Contributors who are 50 years and above.
- Membership of Fund IV - Strictly for RSA retirees only.
| Fund Type | Fund Membership | Minimum exposure to variable income instruments | Maximum exposure to variable income instruments | Risk Level | Objective |
|---|---|---|---|---|---|
| Fund I | Strictly by formal request of Active Contributor and below 50 years old | 20% of portfolio value | 75% of portfolio value | High risk, with a greater allocation to variable income assets like equities | Designed for aggressive growth. Fund I aim for higher returns but carries a higher risk level |
| Fund II | The default fund for Active Contributors below the age of 50. | 10% of portfolio value | 55% of portfolio value | Moderate risk, with a balanced allocation between fixed income and variable income assets | Provides a balanced growth opportunity with moderate risk and returns. Ideal for long-term growth while maintaining stability |
| Fund III | The default fund for Active Contributors aged 50 and above. Contributors can choose to move to Fund II. | 5% of portfolio value | 20% of portfolio value | Low-to-moderate risk, with a focus on more conservative investments in fixed income securities | Prioritises capital preservation over high returns |
| Fund IV (Retirees) | Strictly for RSA retirees only | 0% of portfolio value | 10% of portfolio value | Very low risk, as it primarily invests in fixed income instruments like government bonds | Ensures capital preservation and steady income for retirees, with a minimal emphasis on growth |
For the various Fund Type performance, Click here
For contributors choosing the funds in which they desire to be, the following shall apply:
- An active Contributor in Fund II who wishes to be assigned to Fund I shall make a formal request to his/her PFA.
- An active Contributor to Fund III who wishes to be assigned to Fund II shall make a formal request to his/her PFA.
- An RSA Retiree or active Contributor who is 50 years and above shall not be allowed to choose Fund I.
- An active contributor to Fund II is not allowed to opt for Fund III.
- Fund III is strictly for active contributors over 50 years.
