You want the best fit for your pension scheme members — and your business. But how do you compare, and do you have the right measures of success?
In our 2020 Defined Contribution (DC) Pension Survey we sought the views of trustees, pension scheme managers, finance directors and HR managers from a wide range of sectors, about the challenges they face and their aspirations for scheme members. There is an opportunity to make DC pensions more tailored towards retirement goals, lifestyle, income and behaviours. Our research shows that respondents want to offer competitive, ‘good value’, DC pensions. Most want to do more than the minimum level required, but many do not measure whether they are succeeding in meeting their objectives.
In our report we see how DC schemes in the UK measure up across key areas, including strategy, scheme design, contribution levels, investment approaches and member engagement. The report includes insights from Aon experts on what the findings mean now and for the future shape of workplace savings objectives.
Get the measure of objectives What are the current strategic trends in DC pensions?
More schemes aim to benchmark with peers
than aim to deliver sufficient funds for employees to retire
1 in 3
schemes do not measure progress against their objectives
Over 7 in 10
schemes have ‘delivering value for members’ and ‘improving member outcomes’ as objectives
Weigh up your options Could delegation help?
1 in 3 trust-based and 1 in 5 contract-based schemes
expect to move to master trust over the next five years
in the numbers who have not reviewed their provider in the last three years
Two-thirds want to spend more time on communications
Fit for the future? What are the desired outcomes?
Average default contribution rates are around 10%
Two-thirds of respondents do not know what level of pension outcome their default rates will deliver
of schemes have a put a drawdown solution in place separate to their existing accumulation provider
Made to measure An ever-changing investment landscape
1 in 5 default investments still target annuity purchase at retirement
Charges for default funds are falling
but underlying investment charges remain static
Only 1 in 10
assess their default investment options against ESG criteria, while 4 in 10 offer ESG funds as standalone options
Calibrate your comms We need to talk about pension plans and financial wellbeing
1 in 3
are communicating target levels to encourage employees to save more
Budgeting and non-pensions savings
are the two areas where most plan to expand
Most schemes do not measure levels of engagement
with their pension and wider wellbeing programmes