Target Driven Investing meaning

target Driven Investing (TDI) describes an outcomes-based approach used in defined contribution (DC) pension scheme design. Trustees, employers and providers identify a clear retirement outcome—typically an inflation-adjusted income or pot size at a target retirement date—and then set and adjust investment strategy, risk and contributions to maximise the likelihood of meeting that target. The term is not defined in UK or Irish legislation or case law; it is a descriptive expression used in pensions and investment practice across England & Wales, Scotland, Northern Ireland and Ireland. In legal practice, TDI informs the formulation and review of the default investment strategy, documentation such as the statement of investment principles (UK) or statement of investment policy principles (Ireland), member communications and ongoing governance. Features include setting measurable objectives, using stochastic modelling to monitor the probability of success, operating glidepaths or lifestyle strategies, and making adjustments (e.g., asset allocation, contributions or retirement age) where outcomes fall off track. Adopting TDI does not alter fiduciary duties: trustees and providers must still act in members’ best interests, consider suitability, costs and regulatory guidance from The Pensions Regulator or the Pensions Authority. TDI should be distinguished from target date funds and from target benefit/collective DC schemes.