View more on these topics

Employers with DC schemes bucking their duties, warns Aon Consulting

Many of the large number of employers sponsoring defined contribution schemes are shying away from the practical duties, according to Aon Consulting.

The firm issued the warning as a report issued today by the Pension Institute concluded that DC schemes are being undermined by lack of attention by sponsoring employers and the passive attitude of members to making investment decisions.
 
Aon Consulting, who co-sponsored the report, believes that a member’s investment strategy is one of the key decisions that determines the eventual size of the benefits realised on retirement. Despite this, 94 per cent of members in DC schemes accept the default option, according to the report, believing it to be appropriate for themselves.  However, in many cases too little thought is put into deciding what the default fund should be and many employers with DC schemes are stopping well short of offering suitable support to their employees to enable them to invest appropriately, due to the perceived risks of ‘giving advice’. All of which could result in severely disappointed employees at their time of retirement.
 

Aon Consulting head of defined contribution pensions Paul Macroat says:

“There are many challenges facing the pensions industry as employers continue the shift to DC arrangements. The Pensions Institute report highlights the potential pitfalls that lie ahead for employers with DC offerings. Sponsoring employers need to work with their advisers to deal with the issues raised by the report promptly to ensure that scheme members all invested appropriately to their needs and thus can have well placed confidence in their employer’s arrangements.”

Recommended

Long road to freedom

I refer you to the following debate – on Tuesday, April 17, in debate on occupational pensions, MPs referred to the two-year campaign by The Times to obtain documents under the Freedom of Information Act. Gordon Brown: First, we introduced the Freedom of Information Act 2000. Secondly, I support it. Thirdly, I support the release […]

Industry up to Sipp mischief?

Some insurance companies are paying up to twice the level of commission for new Sipp business than for their personal pension or stakeholder products, despite the majority of Sipp money sitting in insured funds.

Mazars merges with Aim advisory firm

Mazars, the international financial adviser firm, has merged with MRI Moores Rowland, a London-based accountancy and consultancy business.

Rise of the machines

Head of Sustainable Investing at Royal London Asset Management, Mike Fox, looks at the case for including artificial intelligence within a sustainable investment strategy. Read the article in full here The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com