Pensions - Articles - Imaginative perspective and greater intervention key for DC

 Buck Consultants have today released a whitepaper entitled ‘Encouraging membership and effective contributions’ which highlights the importance of encouraging membership of Defined Contribution schemes. Penned by Kevin LeGrand, Head of Pensions Policy at Buck, the whitepaper also addresses the hurdles attached to greater member contribution and the costs attached to implementing better solutions.

 
 Kevin LeGrand commented; “To encourage effective pension contributions, employers should focus the member’s attention on the likely size of his or her pension.”

 
 Extract from Encouraging membership and effective contributions

 With the continued retreat of the state from providing pension and other welfare benefits, the onus is more than ever on individuals to make their own financial provision for retirement. Some may receive help in the form of a workplace pension scheme of some description, to which their employer contributes; the new automatic enrolment requirements will make that the case for all employees by the end of the phasing-in period in 2017. Members will be looking to get the best outcome possible from their participation in such schemes, and employers will be looking to get a decent “return” for the business from their contributions.

  

 In most cases (at least for a while, until new designs are more widely adopted), the scheme on offer is likely to be a defined contribution (DC) one. Members will still need to make decisions at various stages throughout the term of membership. If the member doesn’t make any of those decisions, DC schemes have a default process that will usually do so on the member’s behalf, but on “standard” bases that are unlikely to reflect the member’s actual situation.

  

 To read the full white paper, Encouraging membership and effective contributions, please visit https://www.buckconsultants.com/Portals/0/uk/publications/white-papers/IT-DC-encouraging-membership-UK.pdf