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SUMM
ER 20
19 • I
SSUE
02
MASTER TRUSTSTHE FIRST MASTER TRUSTS WERE APPROVED THIS YEAR AND STRINGENT RULES HAVE THINNED OUT THE MARKET.
PROOF OF VALUEHOW SOME ASSET MANAGERS ARE PROVING THEIR DC PRODUCTS OFFER VALUE FOR MONEY.
DEFAULT OPTIONSHOULD ESG BE A NATURAL PART OF DEFAULT PENSION FUNDS? READ THE DEBATE IN OUR DC ROUNDTABLE.
FIDUCIARY RISINGTHE POPULARITY OF F IDUCIARY MANAG EMENT
Your capital may be at risk. The value of investments and the income from them can fall as well as rise and investors may not get back the original amount invested. This is a financial promotion. These opinions should not be construed as investment advice and are subject to change. This document is for information purposes only. Issued in the UK by Newton Investment Management Limited, The Bank of New York Mellon Centre, 160 Queen Victoria Street, London, EC4V 4LA. Registered in England No. 01371973. Newton Investment Management is authorised and regulated by the Financial Conduct Authority.
GROWING RETIREMENTFUTURES
Working in partnership with DC pension schemes to help achieve better member outcomes
newtonim.com/DC
@NewtonIM Newton Investment ManagementT: 020 7163 3984 E: [email protected]
EDITORIAL
Good outcomesMASTER TRUSTS HAVE operated in the UK market for years but by May this year, they needed to seek regulatory approval if they wanted to stay in business. In response, 44 of them decided to quit the market.
We might speculate that perhaps some of these 44 were daunted by The Pensions Regulator’s insistence that master trusts be “open, honest and transparent … and volunteer information about material developments, risks and issues”.
In our report (starting on page 6), we speak to three master trusts that decided to stay, even though they know the regime will be tough.
Master trusts that are likely to be successful, we learn, are those that concentrate on engagement with members over contribution levels and investments. Why? Because those two topics are fundamental to the regulatory aim of achieving ‘good outcomes’ – so good outcomes for members are what master trusts will be judged by.
Nick FitzpatrickGroup Editor, Funds Europe
FUNDS EUROPE
Editorial director, Nick Fitzpatrick Tel: +44 (0)203 327 5682 [email protected] • Deputy editor, Mark Latham Tel: +44 (0)203 327 5683 [email protected] • Research editor, Bob Currie Tel: +44 (0)203 327 5692 [email protected] • Senior writer and Asia editor, Romil Patel Tel: +44 (0)203 327 5684 [email protected] • Online staff writer, Alex Rolandi Tel: +44 (0)203 327 5668 [email protected] • Editor-at-large, Fiona Rintoul [email protected] • Technology & operations editor, Nicholas Pratt [email protected] • Sub-editor, David Ryan • Art director, Lucy Erikson • Publisher, Alan Chalmers Tel: +44 (0)203 327 5680 [email protected] • Head of business develoment, David Wright Tel: +44 (0)203 327 5681 [email protected] • Editorial and events co-ordinator, Paula Towner Tel: +44 (0)203 327 5688 [email protected] • Head of digital, Steve Dimitrov Tel: +44 (0)203 327 5687 [email protected] • Circulation manager, Michael
Fennessy Tel: +44 (0)203 327 5685 [email protected]
EDITORIAL ADVISORY BOARD Penelope Biggs Northern Trust, London • Jean-Baptiste de Franssu Incipit, Brussels • Robert Parker Asset Management and Investors
Council, London • Todd Ruppert Ruppert International, London & Baltimore
SUBSCRIPTIONSubscription enquiries: [email protected] • Delivery in Europe: €385 • Delivery outside Europe: €495
CONTENTSMASTER TRUSTS
Funds Europe DC looks at some of the first master
trusts to gain approval10VALUE FOR MONEYHow some asset managers can claim their flagship DC funds offer “value for money”
14FIDUCIARY MANAGEMENTPopularity spreads from DB to DC, and into Europe
18INSIDE VIEWSeven steps for better communications
21
FUNDS EUROPE IS PUBLISHED BY CAMRADATA ANALYTICAL SERVICES LIMITED • 80 LEADENHALL STREET, LONDON EC3A 3DH, UNITED KINGDOM. TEL: +44 (0)20 3327 5679 FAX: +44 (0)203 3327 5693 © CAMRADATA ANALYTICAL SERVICES LIMITED, 2019
TOTAL AVERAGE NET CIRCULATION 10,790 AUDIT PERIOD 1ST JULY 2017 - 30TH JUNE 2018 • ISSN 1477-4453 • PRINTED BY BUXTON PRESS
THE VIEWS EXPRESSED IN FUNDS EUROPE DO NOT NECESSARILY COINCIDE WITH THE VIEWS OF THE PUBLISHERS. ALTHOUGH THE PUBLISHERS HAVE MADE EVERY EFFORT TO ENSURE THE ACCURACY OF THE INFORMATION CONTAINED IN THIS PUBLICATION, NEITHER CAMRADATA ANALYTICAL SERVICES LIMITED NOR ANY CONTRIBUTING AUTHOR CAN ACCEPT ANY LEGAL RESPONSIBILITY WHATSOEVER FOR ANY CONSEQUENCES THAT MAY ARISE
FROM ERRORS OR OMISSIONS CONTAINED IN THE PUBLICATION OR FROM ACTING ON ANY ADVICE GIVEN. IN PARTICULAR, THIS PUBLICATION IS NOT A SUBSTITUTE FOR PROFESSIONAL ADVICE ON A SPECIFIC TRANSACTION.
06
ROUNDTABLEPension scheme
managers and asset managers discuss ESG, investing and
technology
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This material, issued by Capital International Management Company Sàrl (“CIMC”), 37A avenue J.F. Kennedy, L-1855 Luxembourg, is distributed for information purposes only. CIMC is regulated by the Commission de Surveillance du Secteur Financier (“CSSF” – Financial Regulator of Luxembourg) and manages the fund(s) which is a (are) sub-fund(s) of Capital International Fund (CIF), organised as an investment company with variable capital (SICAV) under the laws of the Grand Duchy of Luxembourg and authorised by the CSSF as a UCITS. All information is as at the date indicated unless otherwise stated and subject to change. © 2019 Capital Group. All rights reserved.
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C56398 GHIO ENGLISH_Funds Europe 293x216mm_v2.indd 1 25/07/2019 15:26
‘Medium risk, medium allocation’THE PENSIONS REGULAT OR’S DEADLINE FOR MASTER TRUST APPLICATIONS
HAS PASSED. ELLIE DUNCAN AND ELIZABETH PFEUTI ASK SOME OF THE F IRST PROVIDERS T O CROSS T HE L INE TO SPELL OUT THEIR PROPOSIT IONS .
MASTER TRUSTS
funds-europe.com 7
COMMUNICATION AND INNOVATION were the key themes The Pensions Regulator (TPR) wanted to see from the UK’s existing defined contribution master trusts, which had to apply for authorisation by spring this year.
On its website, the regulator stated its demands from supervised schemes: “We expect you to be open, honest and transparent. We will expect you to engage with us proactively and volunteer information about material developments, risks and issues.”
The challenge might have been too much for some, with 44 opting to exit the market. That left just 38 to submit to TPR’s scrutiny. But while the new authorisation process may be thinning out the field, it is helping to drive up standards in the master trust market, according to experts.
“Obtaining master trust authorisation is just the first step,” says Mark Futcher, head of DC at Barnett Waddingham. “It seems likely we will continue to see increasing governance burden in a bid to raise standards further and improve member outcomes. We believe the regulator is keen to see further consolidation as they believe bigger is usually better.”
Success for asset managers – and others – in this market will increasingly depend on the power of their member communications and the innovations they bring in to improve investment outcomes. Futcher says engagement efforts by master trusts should not try
to educate members on investment matters. Instead, he says: “We see providers’ engagement concentrating on the key messages of stay in, pay more in and seek help at retirement to ensure you use the pot wisely.”
L&G MastertrustWith £7 billion (€7.8 billion) in assets, the L&G Mastertrust is the largest in the UK and has 109 participating employers. It was the second master trust to be authorised by TPR back in April.
Emma Douglas, head of DC at Legal & General Investment Management, says the aim of the authorisation process was to sort those committed to providing excellent service to members from those that may have seen it as too much of a challenge.
“The regime is tough,” she says. “The standards are high and that has clearly been a bar that a number of people in the sector have decided they are not going to meet.”
She adds: “I think it is absolutely right that the winners in the market will be the ones focused on engagement and investment because basically, if you look at member outcomes, they will depend on how much money is going in and how it performs.”
Demonstrating its willingness to embrace investment innovation, L&G became the first master trust to launch a multi-asset environmental, social and governance (ESG) default fund earlier this year.
MONEY PRESERVE - One prov ider uses an an imated jam jar to i l lus t ra te sav ings leve ls .
“IT SEEMS LIKELY WE WILL CONTINUE TO SEE INCREASING GOVERNANCE BURDEN IN A BID TO RAISE STANDARDS FURTHER AND IMPROVE MEMBER OUTCOMES.”Mark Futcher
funds-europe.com 98 February 2017
He adds: “We look at member outcomes as being that we want the member to understand what it is the scheme can do for them, [and] we want the member to understand what their employer can do for them.”
But, for Bird, this does not mean telling them to up their contributions. “Many people would say, ‘We want them to pay more contributions,’ but we don’t agree with that. It is probably true most of them should, but it is not for us to judge that.
“There’s a simplified benefits statement project going on in the industry generally, which is a good idea. But we don’t think that is enough, really,” he says.
Lifesight has developed a new, more interactive benefits statement, embedded in its main website, that it will start sending out in July.
“It takes [members] through a little [animated] journey… which shows them what they had at the beginning of the year in a jam jar,” says Bird. “And then adds in contributions, the investment returns, takes away charges, so they get the picture of what’s happened to them over the year.”
The Future World Multi-Asset Fund is one of two approved alternative default options that the L&G Mastertrust offers, in addition to its main default option.
Douglas says: “Almost every trustee meeting that I go to, or employer governance meeting, there is lots of discussion around what is happening on ESG. For us, it is quite important that we not only reflect the environmental bit – the ‘E’ of it – but we also reflect the social and governance parts of it as well.”
She says constant investment innovation is important, as “this is where the assets are likely to stay, and so it is really important within that master trust community things do not get stagnant”.
Another investment area L&G Mastertrust has been looking at is access to illiquid assets in DC, such as infrastructure. Douglas, who is a member of its investment committee, says it would be “sad for the DC industry if master trusts were not really leading the way in some of this innovation”, adding that improving outcomes for members is a big challenge.
“There is very close review of the main default and the alternative default options,” she adds. “There is also a review of all of the default options that are set up by employers under what we call shared governance. So, within the master trust, an employer can construct their own specific default fund.”
The L&G Mastertrust uses a mix of media to communicate to members across a range of employers. Indeed, it recently began sending out personalised benefit statements in video format.
Willis Towers Watson LifesightWillis Towers Watson’s Lifesight was the first master trust to gain authorisation from TPR in February this year, having been the first to apply. David Bird, head of proposition development at Lifesight, says the master trust is focused on larger employers.
“I would characterise our membership as being people who have already engaged with pensions – they’ve been enrolled in pension schemes before, so they’re not new to savings in this way,” he says.
This means when it comes to communication and engagement with employees at those firms, persistency and consistency are the aims. “Our response is to always present information to the member which is about them,” says Bird.
With regards to investment innovation though, he says members tend to be only fleetingly interested. “It is not that people couldn’t understand it, I don’t mean it [to be] in any way patronising. It is just that people have, in their view, more important things to worry about.
“So, it is our job to worry about it and it is the trustees’ job to worry about it and do the right thing. And to find ways – when they are interested – they can find out about it and you can tell them about what you’re doing.”
MASTER TRUSTS
“MANY PEOPLE WOULD SAY, ‘WE WANT THEM TO PAY MORE CONTRIBUTIONS,’ BUT WE DON’T AGREE WITH THAT. IT IS PROBABLY TRUE MOST OF THEM SHOULD, BUT IT IS NOT FOR US TO JUDGE THAT.”David Bird
8 Summer 2019
funds-europe.com 98 February 2017
Salvus Master TrustWith £175 million of assets, Salvus Master Trust is the sixth or seventh-largest master trust in the UK, according to head of sales Bill Finch. The trust has submitted its authorisation application to TPR and is awaiting the outcome.
“[It was] a costly exercise for us, but we think it is worth it and we think the government was quite right to put an exercise of this nature in place, just to ensure the quality of those people operating master trusts is at the required level,” he says.
In May this year, Salvus Master Trust launched an app for its 62,000 members that provides them with a range of services, including savings modellers, tax tables and regular news feeds. “It gives members information on all aspects of their financial lives and it gives them a link to their own records via our member portal,” says Finch.
The fact that in the Salvus Master Trust, around 99.8% of money sits within the default fund indicates to Finch immediately that members are not engaged. “If people are going to engage – and we want them to because we think it helps them to appreciate what they have got and be able to understand the value of what is being paid on their behalf by the employer – you’ve got to make it simple and you’ve got to do it on their terms,” he says.
“The way people engage, not only in their financial lives but their lives in general these days, is very much online, so things like having an app are helping us to steal a march on the market in terms of how we innovate that communications piece.”
On the investment side, he says Salvus is preparing to launch a “more innovative” default fund option in early 2020. “I think it is fair to say our default is fairly vanilla, but that need not be seen as a bad thing – from the investment point of view, an automatic
enrolment default has to be all things to all men,” he says. “It makes an awful lot of sense for the default in an automatic enrolment scheme to be medium risk, medium allocation.” fe
“IT MAKES AN AWFUL LOT OF SENSE FOR THE DEFAULT IN AN AUTOMATIC ENROLMENT SCHEME TO BE MEDIUM RISK, MEDIUM ALLOCATION.”Bill Finch
£7BILLION
Total assets of the L&G Mastertrust – the largest in
the UK, with 109 participating employers. It was the second
to be authorised by TPR.
The difficulty with reporting value for money
ASSET MANAGERS SU CH AS ALL IANCEBERNSTEIN AND SCHRODERS ARE DETERMINED TO SHOW THAT THEIR FLAGSHIP DC FUNDS OFFER VALUE. ELLIE DUNCAN AND ELIZABETH
PFEUTI LOOK AT THE PROCESS AND CONSIDER HOW THIRD-PARTY PROVIDERS CAN HELP .
TRANSACTION COSTS
10 Summer 2019
ASSET MANAGERS SEEKING to operate in the DC pensions market are under more pressure than ever to demonstrate value for money around transaction costs in their flagship funds.
In part, this is due to regulatory requirements – but it is also part of wider efforts by the DC market to improve transparency to members, helping to engender trust in an industry
that may at times appear rather opaque.Having transaction cost data at their
fingertips has proved problematic for asset managers in the past, though. This is something that the UK regulator, the
funds-europe.com 11
costs and charges in response to a request from a pension scheme,” says Sharman. “This applies to either a workplace personal pension or a DC occupational pension.”
Sharman adds that, as a result of these rules, independent governance committees (IGCs) and trustees can obtain information on the explicit and implicit transaction costs that scheme members incur, calculated according to a standardised methodology. “For pension schemes, this will certainly be facilitated by the recently launched Cost Transparency Initiative Templates, of which the data should be aligned to what is being reported for MiFID II.”
Simply having access to this transaction cost data is only one part of the value-for-money puzzle, however. Asset managers are then faced with using that data to explain exactly how it converts into value for members in their flagship DC funds.
Providing contextWith this in mind, asset management firms have been using external tools and services to seek an endorsement for value for money.
In 2018, Schroders signed up to Clear Funds, a service by independent trustee firm PTL that helps trustees and IGCs to understand transaction costs in the DC market. It received its value-for-money endorsement from Clear Funds at the start of this year.
Then in March this year, a second asset manager, AllianceBernstein, appointed Clear Funds to help in assessing its cost transparency.
According to Tim Horne, head of UK institutional DC at Schroders, the focus in the past has typically been on absolute costs of DC funds, something he says is neither helpful nor “what is defined as value for money”.
He adds that further disclosure requirements are not unique to DC, but that the general direction is the
same, “disclosing the transaction costs associated with running a portfolio”. But, he says: “We were very concerned – and I think we are not the only ones in the market – that a number in isolation means very little.”
This is what prompted the asset manager to use a third-party provider – in this case, PTL.
Horne says that when PTL approached Schroders, “they [PTL] were trying to provide a context to what the numbers were, rather than just say, ‘here’s a number’”.
When it came to developing the Clear Funds service, PTL managing director Richard Butcher encountered a number of challenges. “The concept is relatively straightforward,” he says. “We are hired by the asset manager, they give the data to us, we do that value assessment and we then tell them what our view is. We put that view into our report, which they then distribute to their clients.
“But what we felt was, in isolation we might end up with a number as a consequence of doing this. In isolation, that number means nothing at all – it needs to be put into context.”
Butcher said PTL wanted to work out a way of doing an “absolute assessment of transaction costs”. This involved creating
RESULT - Numbers in i so la t ion mean noth ing wi thout context .
“WE WERE VERY CONCERNED – AND I THINK WE ARE NOT THE ONLY ONES IN THE MARKET – THAT A NUMBER IN ISOLATION MEANS VERY LITTLE.”Tim Horne
Financial Conduct Authority (FCA), came to recognise a few years ago.
Pat Sharman, UK managing director for Kas Bank, says that since 2015, DC pension trustees have had to report annually on the level of transaction costs borne by members.
She says: “Despite this, most trustees were unable to do so, because their asset managers could not reliably disclose what these costs were in a detailed and consistent format.”
To address this, the FCA provided guidance, which was published in a Policy Statement on September 20, 2017 and came into force on January 3, 2018.
“These rules now require those managing investments – broadly, investment managers and insurers – to provide information about transaction
market development where you have agencies putting ratings and gold stars on funds, and trustees are taking that at face value and not understanding a bit more about what is actually going on behind the scenes.”
It is also important that the assessment of value for money is not simply passed directly on to members.
“Members will say they want value for money. But it is for trustees and other fiduciaries to deliver that on their behalf,” Byrne adds.
As Sharman says, there is no single approach to assessment of value (or value for money) and each DC scheme needs to have its own policy, which creates some complexity for DC scheme trustees.
But PTL’s Butcher says this makes for a much more robust process, even if it does mean there is some inconsistency in the market.
He says: “If you have a more abstract concept that is at the discretion of the fiduciary, the trustee or an IGC, [who] have an obligation and a responsibility to the membership, then it is much more difficult for the asset manager to gain their definition.” fe
a model environment, against which the Schroders control environment, or that of any other asset manager, could be compared.
Butcher adds: “In broad summary, we looked at the quantum and instance of transaction costs, then we compared that to a peer group.
“We then looked at the control environment to optimise those transaction costs, we looked further into how that control environment was operating, and those two components – those two areas of tests together – allowed us to say whether the transaction costs at Schroders represented value for money.”
When it comes to peer and client validation, Schroders’ Horne says it is important that there is a level of rigour to any type of assessment in this arena.
Bringing data to lifeThird-party providers are taking different approaches as they set out to qualify value for money in DC funds’ transaction costs.
Sharman, at Kas Bank, says some providers are delivering performance data and expense ratio reporting to asset management firms to assist with value-for-money information. “Others are providing a more consultative approach that guides asset management firms on how they can apply value for money, looking at factors such as how specific funds compare against similar funds in the respective sector,” she adds.
Kas Bank has been collecting cost transparency data for more than seven years. Sharman says the bank’s focus is on identifying all the costs in the value chain – the total cost of ownership – while providing a model to interpret and benchmark this data.
The skill originated in the Netherlands where, according to Sharman, cost transparency reporting to the Dutch Central Bank became a regulatory
requirement for pension schemes in 2015.
“Pension fund trustees and executives wanted an easy and intuitive way to digest this complex information and so Kas Bank developed a visualisation dashboard. This dashboard is critical in bringing cost transparency data to life, ensuring information can be easily interpreted and value for money can be readily assessed,” she says.
A provider in this market taking another approach is XTP, which focuses on identifying and analysing costs and then recommends measures to optimise or reduce them in the longer term, she says.
Behind the scenesSome asset managers are choosing not to outsource to third-party providers, preferring instead to do the work on transaction costs themselves.
Alistair Byrne, head of pensions and retirement strategy at State Street Global Advisors, says: “Within DC – within the UK in particular – we provide our clients, or their consultant or adviser if they prefer, with the now standard cost-reporting templates, which provide information on direct costs and the implicit or indirect costs that are incurred within our funds.”
The client or the consultant can then take that and benchmark it as they see appropriate.
“We have not signed up for any of the validation services,” says Byrne. “We are just providing information direct to our clients and answering questions on that data if they have them.”
While Byrne thinks it will become more common for asset managers to use third-party providers to assess value for money in transaction costs, he says the data can be complex.
“It is important that trustees engage with and try to understand the data,” he adds. “I would be reluctant to see a
TRANSACTION COSTS
12 Summer 2019
“I WOULD BE RELUCTANT TO SEE A MARKET DEVELOPMENT WHERE YOU HAVE AGENCIES PUTTING RATINGS AND GOLD STARS ON FUNDS, AND TRUSTEES ARE TAKING THAT AT FACE VALUE.”Alistair Byrne
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CAMRADATA New Advert.indd 1 12/11/2018 10:47:36
The rise of DC fiduciary managementFIDU CIARY MANAGEMENT WITHIN DC PENSIONS IS ON THE R ISE AS MORE AND MORE
SCHEMES T AKE AN INTEREST IN THE MODEL . FIONA RINTOUL REPORTS .
FIDUCIARY MANAGEMENT HAS LONG been a familiar concept for defined benefit (DB) pension schemes. Today, it is also a possible solution for defined contribution (DC) pensions schemes, and several providers have entered the market.
“Fiduciary managers are turning their attention to DC, and how best they can bring the good work they’ve done for DB schemes to DC,” says Niall Alexander, head of DC at River and Mercantile Solutions. “This in turn has created a market, meaning the interest in fiduciary management has snowballed.”
Some of these providers of fiduciary management for DC schemes are asset managers, while some are investment consultants, sometimes working with asset managers. Aon Hewitt, for example, launched a DC fiduciary management service in 2014 with an investment platform provided by BlackRock.
So, how widespread is the practice in Europe? Well, there has been considerable uptake of fiduciary management solutions by DC schemes, but the market remains small compared to DB, according to Keira-Marie Ramnath, head of fiduciary management oversight and selection at PwC UK.
Variation across Europe is also marked. “The different European countries
are at different stages, because they all had different starting points,” says Paul Boerboom, founding partner of Avida International, an institutional asset management advisory service.
The Netherlands has moved from
DB to hybrid and is proceeding – not without difficulty – towards DC. In France, first-pillar state provision is still important. In Germany, many companies still have pensions liabilities on their balance sheets, and there is a plethora of long-established specialist pension savings vehicles such as Pensionskassen and Spezialfonds. Collective defined contribution (CDC) pension schemes are used in the Netherlands and Denmark, and the UK government has signalled its intention to legislate to allow CDC benefit provision too.
“Not a pure fiduciary”When assessing the size of the market for DC fiduciary management solutions, there are also questions of definition to address. Group personal pension plans and master trust strategies themselves represent a fiduciary management approach but have never been considered “pure DC fiduciary management”, observes Alexander.
“These arrangements are built for the mass market, so are unlikely to effectively reflect the needs of individual schemes,” he says. “But DC fiduciary management within single employer trusts is definitely on the rise, with more and more schemes taking an interest.”
Whatever the current pace of development of DC pension provision in individual countries, an ageing population in Europe means that DC is assuredly the future. With the responsibility for retirement provision thrust on to the individual, good investment outcomes
at a reasonable price are essential if the system is to function. A well-constructed fiduciary management solution can help to make this objective a reality.
“A collective approach provides better access to investment opportunities at a better price, particularly in the alternatives sector,” says Boerboom.
In this way, DC schemes can try to work towards mirroring the sophistication of DB schemes. Right now, the asset allocation within DC schemes is typically
much simpler and less variegated than that of DB schemes, potentially putting future pensioners at a disadvantage.
“On the DC side, you’ve got lifestyling and greater flexibility in terms of lifestyling, but in terms of the make-up of the underlying asset allocation, there is much more use of more expensive alternative-type strategies on the DB side,” says Ramnath.
However, increasing levels of competition and more asset managers entering the DC fiduciary management market are leading to innovation around products and ways of setting up the
F IDUCIARY MANAGEMENT
14 Summer 2019
“SUCCESSFUL FIDUCIARY MANAGEMENT IN DC DELIVERS ON MEMBERS’ NEEDS, AFTER FEES.”Niall Alexander
funds-europe.com 15
WHERE TO NEXT? - F iduc iary managers are turn ing the i r a t tent ion to DC schemes .
Another reason that DC scheme providers may opt for a fiduciary management solution is to allow them to spend more time on strategic issues, such as how best to define and meet member needs, and on other aspects of DC provision, such as communications strategy. It is perhaps easy to underestimate the importance of the latter, but in DC, effective communication with scheme members is almost as important an effective investment strategy.
“Communications and investment strategy are the two key components in DC,” says Alexander. “Communications has long driven engagement, and investment strategy drives the outcome for members. DC fiduciary management allows schemes to spend more time on communications to drive engagement, without sacrificing the outcomes for unengaged members.”
asset allocation. This is becoming more necessary with each passing moment, as investment products become more complex and various, with even the passive universe now encompassing a wide variety of tilts and strategies that require a view.
“It’s about the principle of what they are trying to achieve,” says Ramnath. “The investment market is more complex and there’s a lot more variety out there, so schemes need help with structuring.”
In her view, help navigating that complexity plus bargaining power are the main reasons for a DC scheme to opt for a fiduciary management solution. And if there has sometimes been criticism of the way fiduciary management is delivered for DC schemes, that is perhaps because the link between managing the assets and what members need – a certain level of income in retirement or an income threshold – has been lost.
“Successful fiduciary management in DC is bringing that link back by developing an investment strategy that, given the scheme’s contribution rates, delivers on members’ needs, after fees,” says Alexander.
When deciding if fiduciary management is the right way to achieve a more sophisticated and potentially higher-yielding strategy, much depends on the size of the scheme, says Boerboom. Fiduciary management is a good solution for schemes with €5 billion or less under management. Above that, schemes can organise the asset allocation themselves and avoid an extra layer of fees.
Costs and decent marginsCost is a consideration. In a 2015 DB fiduciary management survey by Aon Hewitt, 62% of respondents saw cost as a disadvantage. And there is a flipside to that equation too.
“My concern is whether providers
can make a decent margin out of this,” says Boerboom.
This is especially true of providers that aim to offer a pan-European solution. A complex brew of legacy systems and country-specific regulations makes this a tough task, though Boerboom says that a handful of providers have developed very good pan-European products.
“LIKE ANY OTHER EMPLOYEE BENEFITS, RETIREMENT BENEFITS, LOCAL OR CROSS-BORDER, MUST ADAPT IN BOTH DESIGN AND DELIVERY.”
Nicolas Hubé
Digitalisation plays a role here. As Nicolas Hubé, director of global benefits at Johnson & Johnson, noted in a recent interview, the digital revolution completely changes how we access information and how we perform transactions. DC pensions are part of that revolution.
“Like any other employee benefits, retirement benefits, local or cross-border, must adapt in both design and delivery,” says Hubé. “Digitalisation opens the door to more flexible approaches that give employees more choices.”
In the individual DC world in particular, robo-advisers could help with portfolio implementation.
“A lot of research is going into that,” says Boerboom. “Robo-advisers could make things more cost-efficient.”
The drive towards environmental, social and governance (ESG) investing is another important market-wide trend. Boerboom says: “People are looking for green solutions. Europe-wide, offering green, environmentally friendly DC is a way for fiduciary managers to differentiate themselves.”
When considering the future of fiduciary management, it is also important to look at the bigger rewards and compensation picture. Here in Europe, we can learn lessons from more developed markets such as Australia, says Ramnath.
“The workforce is becoming a lot more mobile. That requires increased flexibility in the way we structure benefits.”
In fact, in 30-40 years’ time, with people working longer and in a more flexible way, there may be no pensions at all in the traditional sense, Ramnath says. Instead, people may simply buy some form of insurance, such as morbidity insurance.
Social problemUnderlying these developments is a move towards greater individual choice,
F IDUCIARY MANAGEMENT
and this presents a clear need for one thing: education. Experience to date, such as with 401k in the US, suggests that individuals typically don’t make good decisions when it comes to investing their pensions pot. That has the potential to become a social issue, and Boerboom therefore sees a big role for government in solving the problem.
“People need to be made more financially literate,” he says. “That’s an important part of the fiduciary management offering.”
16 Summer 2019
“THE WORKFORCE IS BECOMING A LOT MORE MOBILE. THAT REQUIRES INCREASED FLEXIBILITY IN THE WAY WE STRUCTURE BENEFITS.”Keira-Marie Ramnath
And it’s not just individual savers who need education. Employers and other scheme providers may not be as well informed as they could be either. After all, as Boerboom notes, DB is in the DNA in many European countries, and this is all new.
“Our main challenge is a lack of awareness,” says Alexander. “While we have been doing DC fiduciary management for many years, many schemes are still unaware that this is a viable solution to better improving members’ engagement and outcomes.”
As the market develops, Ramnath sees more providers coming in. Some are recognisable names from the asset management side, while others are more boutique managers. But all may face the problem identified by Boerboom: fiduciary management for DC pension schemes is labour-intensive and requires skill, but may not be particularly profitable.
“It’s a low-margin business,” he says. fe
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CONNECTING YOU
Seven steps for better pensions communicationTHE KEY TO PROVIDING GOOD COMMUNICATIONS TO PENSION FUND MEMBERS IS HAVING A GOOD PROCESS T O FOLLOW, SAYS JOHANNA NELSON , A COM MU NICATIONS EXPERT AT PUNTER SOUTHALL ASPIRE .
INS IDE V IEW
18 Summer 2019
A RECENT RESEARCH report on pensions communications, Punter Southall Aspire’s ‘It’s Time to change’, highlighted that employees want better communications around workplace savings and pensions. The survey covered 2,000 UK employees aged between 16 and 65 and we found that: • 72% want more support and education from their employer about pensions; and • 68% want their employer to keep reminding them about any actions they need to take concerning their pensions.
Engaging people with workplace savings and pensions has traditionally proven tricky for employers but with the right approach, any company can create a successful communication strategy.
We’ve created a seven-step communications process that companies can follow to better engage their employees with pensions.
Step 1: Set clear objectives with the end goal in sightThe first step is to identify the campaign goals and the desired impact on employees’ saving habits. Specify the results you want, such as a 10% increase in the number of over-55s accessing financial advice or a 50% increase in new staff attending a pensions seminar. The more specific, the easier it is to measure results.
Our research highlighted that people
“IF YOU CAN IMPROVE EMPLOYEES’ GENERAL FINANCIAL WELLBEING, THERE’S OFTEN A POSITIVE KNOCK-ON EFFECT ON THEIR ATTITUDE TOWARDS PENSION SAVINGS TOO.”
are more concerned about existing financial pressures than saving for retirement. For this reason, over 60% are most likely to respond to communications focused on their current financial situation. This means it could be more useful to help people reduce their outgoings before encouraging them to increase their pension savings.
If you can improve employees’ general financial wellbeing, there’s often a
funds-europe.com 19
positive knock-on effect on their attitude towards pension savings too.
Step 2: Segment staff Employees fall into different brackets demographically and financially and will have different attitudes to savings and money. Financial messages that ‘speak’ to one group may be irrelevant to another. Divide staff into several groups and send tailored communications that will resonate with each. The more targeted, the more effective the campaign will be.
Step 3: Time the communication correctly Time your communications to make an impact. With retailers, for example, there’s no point sending staff important pensions information in the run-up to Black Friday, when everyone is super-busy. On the other hand, HR might consider running a pension campaign to coincide with a general pay rise. Everyone will be thinking about money anyway.
Our research found people are most open to communications about savings when starting a job (56%) or leaving a job (76%), and when they are talking about changes to their remuneration (60%) or benefits (72%). Roll out campaigns at these junctures, when staff are most receptive.
Remember, one-off campaigns won’t change employees’ behaviour long-term. Drum messages in with ongoing comms.
Step 4: Create some key messagesIt’s now time to connect the dots. What key messages will your business convey? What arguments will persuade each group to act? What questions need answering and what objections need addressing? These messages are the heart of the campaign. Express them simply and avoid jargon to get the audience’s attention.
It’s tempting to scare employees into saving more, highlighting the negative
consequences of not saving enough. But using scare tactics to discuss pensions has become so common, people have switched off.
Just 38% of people told us they would respond to scare tactics, and even fewer – 32% – said they would respond to guilt tactics about not saving. Use positive messages instead. Help people imagine a retirement they’ll love, where they have time to enjoy the hobbies they have now.
Step 5: Pick the channelsUse communication channels favoured by employees. There’s no point sending out emails about how to plan for retirement to staff based on an oil rig, with no internet access. On the other hand, if employers know their employees are glued to their phones, they’ll want to receive texts.
Whilst digital is all the rage, don’t discount print and face-to-face meetings. Remember, it’s not about the way the business likes communicating – it’s how staff like receiving information. If unsure, ask them.
It’s also important to consider reaching employees at home. Seventy-two per cent of people prefer making decisions about their pensions and finances in the evenings or weekends, outside the office.
You could send letters to their home and ensure that any material posted about workplace savings on the intranet is accessible from home too.
Step 6: Perfect the designEveryone wants sleek and professional comms, but if that’s all the design does, it’s missing a trick. Good design can provoke emotions that can help to change people’s savings behaviour.
Avoid standard stock photos. Find graphics that provoke reactions. Make readers laugh, excite them, inspire them to think about the life they want to lead.
Just over 60% of people said they want to see pictures that reflect their life currently, rather than pictures of their retirement decades ahead. Today’s
“DON’T DISCOUNT PRINT AND FACE-TO-FACE MEETINGS. REMEMBER, IT’S NOT ABOUT THE WAY BUSINESS LIKES COMMUNICATING – IT’S HOW STAFF LIKE RECEIVING INFORMATION.”
reality will always provoke stronger emotions than theoretical future events.
Colours will influence emotions, too. A good designer will make sure that the design reinforces the key messages.
Step 7: Measure successMeasure the effectiveness of any campaign. Revisit the campaign objectives again. Did the campaign fulfil them? What worked well and what can you learn? Analyse the campaign’s performance and feedback the lessons into the next set of comms, to see continuous improvement. The seven-step model is a circle, not a straight line, so as soon as one campaign is finished, revisit Step 1 and start again.
Remember, digital campaigns provide lots of data about how well comms performed, so monitor the stats in real time. Ask people what they think too. We found 86% of employees believe employers should seek feedback on their workplace savings communications, so survey staff regularly to find out how they rate comms.
By following this seven-step process, HR can develop a successful comms strategy around pensions and financial wellbeing and change savings behaviour for the better.
Johanna Nelson is an associate director, communications, at Punter Southall Aspire.
ALL AT SEA - There i s no po int send ing emai l s about re t i rement p lann ing to s ta f f who lack in ternet access .
Find out who’s performing well in our latest DC default fund survey.
For more information visit: www.psaspire.com/dc-research
Not all DC default funds are created equal.
PS Aspire is a trading name of Punter Southall Defined Contribution Consulting Limited. Punter Southall Defined Contribution Consulting Limited is authorised and regulated by the Financial Conduct Authority (FCA) with FCA
reference number 121328.
dc default survey - funds-europe - version2.indd 1 22/07/2019 13:34:16
IF SAVINGS ARE a money trail, then it takes no more than a couple of steps to reach the default fund in defined contribution pension schemes. This is where almost all the money people save in modern workplace pension schemes ends up. The sixth annual Camradata DC roundtable began by acknowledging this fact.
The Nuclear Decommissioning Authority’s (NDA) group pensions manager, Steve Hayton, said about 75% of DC assets were housed in the scheme’s default fund; Elizabeth Garner, head of pensions and investments at charity Save The Children, said more than 90% of its members’ total DC savings were in the default.
Given this weight of savings, the panel was asked whether environmental, social and governance (ESG) considerations should be baked into the default option.
“IT IS STILL EARLY DAYS AND WHILST ESG IS BEING CONSIDERED ACROSS OUR CLIENT BASE, MAKING A SPECIFIC ESG ALLOCATION WITHIN THE DEFAULT STRATEGY ISN’T THE NORM. IT HAS BEEN MORE AROUND UNDERSTANDING HOW EXISTING MANAGERS ARE CONSIDERING ESG.”Erica Beltrami, LCP
IF M OST DC PENSION MONEY ENDS UP IN DEFAULT FUNDS, WILL IT BE INVESTED ALONG ESG L INES TOO? BRENDAN MATON SPEAKS TO LEADING PENSION PRACTIT IONERS , WHO
ALSO D ISCU SS EMERGING MARKETS INVESTMENTS AND USES FOR TECHNOLOG Y.
Where the money leads
DC ROUNDTABLE
21 Summer 2019
PANEL
STEVE HAYTONGroup pensions manager, Nuclear Decommissioning Authority
ELIZABETH GARNERHead of pensions and investments, Save The Children
ERICA BELTRAMIPartner, LCP
JIN PHILIPSHead of strategic relationships, Emea, Newton Investment Management
NIALL ALEXANDERHead of DC solutions, River and Mercantile Solutions
JOSH CONRANAssociate director for UK institutional, Capital Group
MARTIN WILLISPrincipal, Barnett Waddingham
ALAN EMBERSONDirector of workplace solutions, PS Aspire
Photographs: Simon Way
funds-europe.com 22
apply ESG criteria in a static fashion, according to Josh Conran, associate director for UK institutional at asset manager Capital Group. As an example, he pointed out that analysing and engaging with companies thoroughly can mean potential issues are identified long before any scandal; this contrasts with many ESG rating systems that pick up issues only after an event. Such backward-looking assessments were in contrast to the Capital Group approach,
“It is still early days and whilst ESG is being considered across our client base, making a specific ESG allocation within the default strategy isn’t the norm. Instead it has been more around understanding how existing managers are considering ESG,” said Erica Beltrami, a partner at LCP, a pension fund consultancy.
“Further consideration around whether a specific allocation should be made is the natural next step as ESG integration becomes the norm.”
Integration means including ESG considerations in all aspects of capital management, not merely offering it as an option on the side.
“Schemes can and should evaluate asset managers on ESG integration. Ask your manager to demonstrate how ESG is integrated across their research and portfolio construction processes – not at one point in time, but on an ongoing basis,” said Jin Philips, head of strategic relationships, Emea, at Newton Investment Management.
She explained that if a manager is deploying high-calibre research, then ESG should doubtless form an integral part of that research capability. “We see ESG factors as risks and opportunities, which is why Newton has developed our own, transparent ratings methodology,” she added. “ESG is very much about financial outcomes.”
Niall Alexander, head of DC solutions at River and Mercantile Solutions, distinguished between ethics and ESG. “Ethics are personal. Should people eat meat? Would the world be better off if we all went vegan?”
These issues matter a lot but, for Alexander, they do not relate directly to finance. “We describe ESG as telling factors, just like currency and inflation. So we include them but in the same way – truly holistically rather than a separate debate. And their influence waxes and wanes.”
That means investors should not
whereby ESG analysis is incorporated into a whole-of-company assessment by portfolio managers and analysts on a forward-looking basis.
Philips agreed. On the final point, she noticed that one value-play in ESG was to focus on those companies progressing their ESG potential: “the improvers”. Philips said that only backing the recognised ESG champions of today could potentially mean missing out on future financial upside from those companies working to improve their ESG footprint over time.
The debate over ethical versus ESG persists, however, because many people instinctively want to use their wealth to benefit other people with great need, as well as get a return.
“We always have staff asking about ethical options,” said Garner.
“I would have my own retirement sorted if I had a pound for every time I had to explain the difference between ethical and ESG,” remarked Martin Willis, a principal at pension fund consultancy Barnett Waddingham.
He also noted that pension scheme members can put ethics into a collective
“ASK YOUR MANAGER TO DEMONSTRATE HOW ESG IS INTEGRATED ACROSS THEIR RESEARCH AND PORTFOLIO CONSTRUCTION PROCESSES – NOT AT ONE POINT IN TIME, BUT ON AN ONGOING BASIS.”Jin Philips, Newton Investment Management
“WHY WORRY ABOUT THIS STUFF WHEN THERE ARE SCHEMES WITH 100% IN EQUITIES IN THE GROWTH PHASE AT AGES WHEN MEMBERS CAN RETIRE. THERE ARE BASICS TO BE IMPROVED UPON, NEVER MIND THE REFINEMENTS.”Niall Alexander, River and Mercantile Solutions
DC ROUNDTABLE
pension fund, but it requires a high quorum of approval (Cancer Research has a tobacco-free default fund).
As ever with DC, communication raises its head as a major feature. Philips noted that Newton has been working with a major public-sector pension scheme in California to communicate how ESG factors are taken into consideration in the scheme’s ESG balanced investment option. The intention is to communicate directly to the scheme’s members using tangible and local language to convey how their investments impact the environment, society and their future retirement income.
Who the cap fitsThe Camradata panel then segued into fees and costs. These have been influential in the UK market since the government introduced a 75bps cap on default fund costs. Willis argued that people should not see cheap as best or good value.
Alexander’s remedy was for trustees to concentrate on their risk budget first and foremost, rather than extrapolating ‘value’ from past performance and/or fees.
There is a further complication in that the insurers and platforms from whom schemes access investment management typically charge a fee, while the houses that actually do the investment management charge the platforms a sub-fee. The scheme will not see those two elements separated.
Conran suggested that splitting them out could be beneficial. There is currently no guidance to trustees on the two parts in isolation, so they don’t know what they are paying.
Philips asked why administration costs do not get split out from investment costs. This is a moot question, as the latter is typically perceived as the higher of the two, while in reality some platforms take the lion’s
out that daily dealing was not a legal requirement but a norm that merited rethinking. LCP has done just that for a client – taking them into weekly and monthly-dealing funds, which Beltrami claimed was a first – not just for the client, but also for the platform provider.
Newton gains exposure to less liquid assets via listed securities and trusts
share just for administration.Beltrami warned that even if some
platform providers rebuff such attempts to make their charging more transparent, there should continue to be a collective push for more transparency in this area.
The panel then came to some fresh thinking on how trustees might get the kind of risk-return payoff they need for the years ahead. The UK government has been consulting for the best part of a year on how to open up illiquid investments to DC plans. Illiquids here means the likes of real estate and infrastructure, privately traded debt and equity.
Alexander did not see an overwhelming need: “What are you trying to achieve?” he asked. “Why worry about this stuff when there are still a lot of schemes with a UK equity bias; and some with 100% in equities in the growth phase at ages when members can retire. There are basics to be improved upon, never mind the refinements.”
Beltrami, on the other hand, said that DC plans were in the habit of using daily-dealing funds even though a member’s time horizon is over decades. She pointed
23 Summer 2019
“THE EMERGING MARKETS INDEX IS HIGHLY CONCENTRATED WITH, FOR EXAMPLE, OVER 53% JUST IN INFORMATION TECHNOLOGY AND FINANCIALS. AS A RESULT, IT CAN ALSO BE VERY VOLATILE.”Josh Conran, Capital Group
and has been able to harness the diversification benefits of these assets within its multi-asset strategies and solutions.
“Some illiquid specialists also prefer to incorporate listed securities and trusts, because it is currently the most likely way that pension schemes can access the likes of private equity while staying under the price cap,” said Philips.
Greater awarenessOpening up the DC investment landscape means that pension schemes are becoming more aware of the risk-return profiles of all types of investment strategy. This includes the section before retirement where hitherto sovereign fixed income and cash were used to dampen volatility. Nowadays, more active managers are offering higher-return, lower-volatility approaches to appeal to DC plans.
Conran followed Alexander’s point about doing better from within the universe of public securities by making the case for putting more exposure to emerging markets (EM) into UK DC plan portfolios. He explained that emerging markets [as defined by MSCI] account for 40% of the global economy and 70% of its growth. Yet in global equity indices, these countries receive only 11% of the weighting, and often even less than that in DC default funds.
One route he strongly advised against, though, was merely tracking a representative index of leading EM companies: “The EM index is highly concentrated, with for example over 53% just in IT and financials. As a result, it can also be very volatile.”
Instead, Capital Group advocates taking a broader approach to emerging markets – including EM debt and also companies outside emerging markets that derive most of their revenues from those countries. This then lowers the heavy exposure of the EM equity index
to banks, insurers and IT stocks. To this, Capital adds governance and company engagement. The result is a strategy that produces cumulative returns equivalent to the index but with considerably less volatility.
Hayton said he would be interested in the money-weighted returns as these reflected the lived experience of a DC saver. Philips noted from an emerging markets debt perspective, large UK DC
schemes have implemented absolute bond strategies, such as Newton’s global dynamic bond strategy (GDB) as part of the default. “GDB is a way for schemes to gain selective, actively managed emerging markets debt exposure tactically alongside global HY, sovereign and corporate fixed income exposure,” she said. “The strategy’s absolute return focus is closely aligned with DC members’ desired outcomes in the growth and in-retirement phases.”
Philips commented that the extraordinary equity returns of the past ten years has undoubtedly impacted default design and asset allocation decisions. She said that focusing on relative performance has been palatable over that period, but “we ultimately should be focusing on absolute returns and outcomes for DC members”.
Late adoptersThe golden age of DC is not yet here: one reason being the slowness of financial services in the UK to embrace technology. It is now possible to manage most of your day-to-day money needs using a smartphone. Challenger banks
funds-europe.com 24
“WE HAVE GENERATIONS OF THE SAME FAMILY WORKING FOR US. AND THERE WILL BE WORK FOR ANOTHER 100 YEARS AT SOME SITES.”Steve Hayton, Nuclear Decommissioning Authority
and tech-focused specialists will bring together on one screen various savings pots, including ISAs and SIPPs alongside current and deposit accounts. But progress has largely been thanks to the ambition of the tech companies rather than incumbent banks and insurers. Pension funds and administrators are even further behind the curve. In spite of the trillions of pounds saved specifically for retirement, there is no popular pensions app. The Camradata panel discussed why.
“We have created a pensions dashboard, but there has not been a joint
initiative with the wider savings industry,” said Garner. “Post-pension freedom, I think people do think of pensions as savings but they can’t access them in the same way.”
Willis said that pension providers were reluctant to engage in a way that would offer scheme members all their financial accounts on one screen, i.e. pensions
DC ROUNDTABLE
25 Summer 2019
alongside current account and insurance policies. In theory it is possible, but in practice it is not happening.
Alan Emberson, director of workplace solutions at PS Aspire, said that it was now possible to establish such a savings dashboard (if you have the right underlying technology platform in place). However, that does require the member’s consent to such data requests and schemes needed to make the effort to negotiate with their relevant providers to get these types of data feeds established. Some companies can facilitate this, he said, but in workplace pensions more generally, “we are not there yet”. That is because, according to Emberson, no one has yet answered the big question of who should be paying for such unification. At present, it could be the employer, the scheme or the members themselves.
Like most bigger pension consultancies, both Barnett Waddingham and PS Aspire offer platforms that tackle the issue. The former’s, called ME2, works as a web app. But it doesn’t have feeds from every source – student loans, for example – and cannot currently model big expenditures such as weddings.
26 Summer 2019
DC ROUNDTABLE
This matters, because if ordinary working people are to gain a better understanding of what their pension savings can do for them – as part of total wealth and personal finance – then pension providers need to reshape their communications into the kind of language around spending that ordinary people understand.
Beltrami said that people don’t start planning for retirement in response to a figure on a sheet of paper. They need help to think about what sort of lifestyle they expect: for instance, do they want to eat out once a month or twice a week? Beltrami said the pensions industry needs to offer more straightforward communication on this level of ordinary household budgeting.
Willis agreed. As one example, ME2 uses images such as cocktails to help client schemes’ members decide how much they want to spend on drinking and socialising.
Hayton told the panel that “the solution is not to tell people what to save but to offer better modelling to help them understand”. The NDA’s flagship scheme recently switched its plan administrators to give members new tools that allow them to do just that – in other words, work out what they need to save under various scenarios.
But the NDA is an unusual employer, often one of the biggest in the locale, with a unique purpose, which makes for a very loyal and stable workforce. “We have generations of the same family working for us,” said Hayton. “And there will be work for another 100 years at some sites.”
Nuclear energy is thus the only man-made activity with a longer life than pensions. Elsewhere in the UK, however, employees come and go. Fundraisers at Save The Children might stay for just two or three years, according to Garner. Which brings us back to Emberson’s question of who should pay the cost of
data aggregation and, with regard to work patterns, the hauling of pensions into the 21st century. “Why should employers wish to take on the responsibility for a future benefit that may materialise 30 or 40 years further down the line when the employee may only stay in that organisation for a few years?” he asked. “Employers will want to look after their employees - but perhaps only for that shorter time period.”
PS Aspire’s platform extends across all savings and finances and is designed to support the process of financial guidance for larger audiences, which Emberson distinguishes from advice. The platform aims to offer value even for workers with relatively little in the way of savings – pots of £30,000 or above – where the existing adviser market fails to offer cost-effective solutions. The system is geared towards assisting self-selection. However, Emberson emphasises that there comes a point where people do need a proper human contact, “a voice”, before executing important financial decisions.
And here the panel touched upon the kind of “voices” workers currently rely on. Both Hayton and Beltrami noted that,
worryingly, colleagues in the workplace were often easiest to approach because they are trusted individuals. Hayton said there was an excellent response to roadshows when NDA was in the process of announcing the new DC scheme to employees. Save The Children also gets an annual roadshow from its scheme provider. So, physically meeting pension professionals responsible for running savings has a positive influence.
Beltrami contrasted this with badly designed technological help: members’ frustration with the rigmarole of log-ins to access their pension account online will have an impact on how much they are willing to engage with their pension.
That is just dawning, thanks to the compulsory nature of auto-enrolment. Moreover, Philips noted that by 2050, as much as half the UK workforce could be self-employed. It’s imperative for the DC pensions industry to be more mobile (physically and digitally) as a greater proportion of the population becomes aware that they have one or more pension pots. They will be searching for them online and ideally from their mobile device. fe
LONG-TERM SAVINGS - E l i zabeth Garner (p ic tured) , head of pens ions and investments a t Save the Ch i ldren , took par t in the DC roundtab le .
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