Senior Insight Editor Laura MacPhee gives a sneak preview of what to expect from the second annual report on excellence in the defined contribution pensions market
Never has there been a more disruptive year for defined contribution. This year’s DC landscape is virtually unrecognisable from last year’s. Schemes have had to deal with the charge cap announcement, the new framework for CDC, and of course the groundbreaking Budget reforms.
The ripples of each of these changes are starting to be felt throughout the UK, as we found in our survey of 150 DC pension funds.
This report is now in its second year, and we are delighted to be working with J.P.Morgan Asset Management on this pioneering research. Throughout this report we aim to showcase examples of best practice as we unveil this year’s top 50 DC schemes. These pension funds have each excelled in at least one of the following areas: scheme design, investment strategy, governance, communications and administration.
We have introduced two new chapters – one which explores the impact of the Budget and how DC schemes are reacting to the announcement, the other which addresses employer philosophy. As we analysed the results of this year’s survey we discovered just how pervasive the company’s ideology was, and how much it influenced scheme decisions.
The charge cap is a far more serious problem than we had anticipated
We have also highlighted some issues which may become troublesome if left unresolved. The charge cap, for example, is a far more serious problem than we had anticipated. We also found a worrying disconnect between the importance respondents placed on communications and how effective they have proven so far.
We were able to draw upon last year’s results to chart patterns and see where schemes have made improvements and ongoing developments have come to fruition. It was encouraging to see so many new entrants in this year’s top 50.
We also had the advantage of being able to compare our findings with those from a survey J.P.Morgan Asset Management recently carried out with US pension schemes. There were some striking differences between the two cultures – particularly when it came to employer philosophy – but also some surprising similarities.
We hope you will find this year’s report as illuminating and thought-provoking as we have. If you missed last year’s report, you can download it here.