How the UK’s top DC schemes are responding to the last 12 months in pensions
In the spring of 2014, the then-chancellor George Osborne announced changes that would shake the pensions industry beyond recognition. Our annual DC landscape survey has monitored the effects of these changes since, to understand just how UK pension schemes have adapted as a result. And they’ve done just that – adapted, time and time again.
Fast forward to 2016, and the industry has yet again undergone a raft of cataclysmic changes. So far this year we have had Brexit, a new prime minister and a brand new team at the Department for Work & Pensions. With a new pensions bill due imminently, yet more change could well be on the horizon.
For the fourth edition of the DC Landscape survey and report, in association with J. P. Morgan Asset Management, we spoke to 139 DC pension schemes to find out just how they were coping with the latest bout of change.
The majority of schemes we spoke to are still using a lifestyle fund for their default, but the number choosing a target date fund is creeping up. What is changing is the final asset allocations that their default funds target. Thirty-seven per cent of respondents now have a mix of annuities, cash and drawdown, which shows that the impact of freedom and choice is now filtering through to scheme design.
Communications came out as the top priority for schemes in the year ahead, showing a growing awareness of the importance of member engagement. As scheme managers and trustees become more used to the new freedoms, and the responsibility they have to provide adequate retirement provision whatever members choose, post-retirement options followed in second place as this year’s priority.
Once again we showcase shining examples of best practice among schemes, based on their scheme design and investment strategy, communications, employer philosophy and administration structures.
We hope you will find the results as illuminating as we have.
To download the full report, click here.