- Latest conference brings together industry experts to discuss challenges and opportunities –
19 November 2018 – Challenges and opportunities in the world of DC Pensions were discussed by speakers from Legal and General Investment Management, Fulcrum, Smart Pension, the PLSA and Punter Southall Aspire at CAMRADATA’s ‘Decoding DC Pensions’ conference hosted in London last week.
Sean Thompson, Managing Director, CAMRADATA said: “While auto-enrolment and pensions freedoms have been hugely positive, they’ve brought challenges, such as delivering the right administration, the impact of the rise in contribution rates, the challenge of engaging members and getting them to save more, and the role of Master Trusts. We’re in a new DC Pension world and our conference explored these challenges and future opportunities.”
Building effective pensions engagement, simplifying retirement solutions for DC members, regulation, Master Trusts, DC default design and DC scheme reviews were all subjects discussed.
Here are some conference highlights:
New retirement solutions for DC members
Emma Douglas, Head of DC at Legal and General Investment Management highlighted its upcoming launch of a new blended ‘4 pot’ at retirement solution that will simplify options for DC Pensions members. The 4 different pots will cater for different stages of retirement, from the early ‘cruise’ years to the later ‘snooze’ years. The pots will be divided into DC Income, long term savings, inheritance and additional spending. This technology-led solution will be delivered in partnership with Smart Pension.
Building the business case for benefits
How to improve employee engagement with benefits was discussed by Annette Frem, Employee Experience Director at Future Kings. She said 96% of employees underestimate their employer’s spend on benefits, but the next generation of jobseekers will be far more influenced by employee benefits. Employers will need to ensure their benefits packages meet their employees’ needs and motivates them. The will need to be aligned to the corporate values and vision and promoted at every opportunity to drive better engagement, which will also support the recruitment and retention strategy.
Technology will transform pension communications
Alan Emberson, Punter Southall Aspire’s Director of Workplace Solutions presented new research on pensions communications and engagement, ‘‘It’s Time to Change’ offering insight and guidance on how employers can transform and optimise their pensions communications. He said technology will be the game changer in transforming engagement. He said employers are already improving their engagement using platforms such as Punter Southall Aspire’s myaspire.com, which allows people to view their mortgage, pension, bank accounts and savings in one place.
Master Trusts: The New World
Paul Budgen, Director of Business Development at Smart Pension highlighted the challenges of Master Trust authorisation in terms of compliance, capital and what the future will bring. He said the complex authorisation process has shrunk the market, but believes it will lead to good outcomes. He said: “When it comes to Master Trust Authorisation, I think around 10 really well run, world class pension schemes that emerge will be really successful and that people will trust.”
Default Funds
Christos Bakas, DC Investment Consultant at Punter Southall Aspire, was interviewed by Nick Fitzpatrick, Group Editor at Funds Europe about findings from the company’s latest Default Funds Survey, which charts the performance of default funds at the growth and consolidation phase.
Notable findings were the high levels of passive investing in both phases. Christos said that while this strategy is fine in a Bull market, more active management may be needed in a downturn. He noted that asset allocation is becoming more dynamic and, whereas investments at the consolidation phase typically moved from equities to bonds, more investments are now in equities to reflect the fact people are living longer.
James Walsh, Policy Lead at the PLSA, discussed the latest policies and research in the industry. He addressed the fact millions are under saving for retirement. He highlighted the benefits of The Pensions Dashboard and other initiatives such as mid life financial MOTs as potential solutions.
Matthew Roberts, Partner at Fulcrum Alternative Strategies at Fulcrum Asset Management spoke about whether the time was right to include Diversified Liquid Alternatives in DC default design and the risks involved.
Representatives from Next Gen Now then highlighted the need for younger members to have more of a voice and influence in the DC Pensions World.
Tony Filbin, Chairman at Capital Cranfield discussed the role of the Fiduciary in the DC landscape and lastly, Gavin Zaprzala-Banks, Principal at Punter Southall Aspire discussed DC scheme reviews and how member outcomes can be altered with people making small changes to their planning and savings behaviour.
Matthew Roberts from Fulcrum Asset Management said, “The conference was a great opportunity to share the future for DC default design, particularly with regards to Alternatives.”
Annette Frem at Future Kings said, “The conference helped us all understand the latest thinking and issues in the DC pensions industry.”
Paul Budgen at Smart Pension concluded, “This was a great opportunity to bring experts together to discuss some difficult subjects. The answers were in the room and the conversations helped to get us to a better place.”
