Pensions - Articles - Hymans Robertson comments on OECD Pensions Outlook 2012

 In response to the OECD’s Pensions Outlook 2012 report Lee Hollingworth, Head of DC at Hymans Robertson, commented: “As we all are living longer, more clearly needs to be done to help employees save effectively for their retirement. Auto-enrolment will help to significantly increase the coverage of occupational pension schemes and we agree with OECD’s assertion that a sufficiently high contribution rate is needed.

 Our estimates suggest a 10 per cent contribution rate for 40 years would only give a 50 per cent chance of achieving half of your working life income as a pension at retirement. However, a higher contribution rate on its own will not be enough. Companies need to invest more time into the actual design of their schemes to ensure they are effective vehicles for building employees’ retirement incomes. Good DC outcomes are possible within the current system that is in place, but creating the right infrastructure to provide good outcomes is the key.