Professionals fear DC pension poverty
Inadequate retirement income from defined contribution pensions tops a list of “undesirable scenarios” most feared by finance industry professionals, says Watson Wyatt.
The firm’s 2020 Vision survey reveals how institutional investors feel about 10 possible adverse events or situations that could occur in future, including increased complexity of investment products, poor economic conditions, and scandals hitting investor confidence.
“Many DC plan members spend a disproportionately small amount of time each year thinking about their pensions,” said Paul Trickett, Watson Wyatt’s European head of investment consulting.
Watson Wyatt says that more sophisticated investment approaches for members of DC schemes are now available but it wants more alternatives.
It is challenging providers to come up with products that look simple on the surface but are underpinned by a sophisticated investment rationale, as an alternative to giving greater fund choice to DC scheme members.
The firm says most employees in the UK are now in DC plans, and employers have increased financial education in the workplace.