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Maria Nazarova-Doyle, Head of DC Investment Consulting at JLT Employee Benefits comments on the first round of increased pensions contributions under auto enrolment. |
“Enforcing greater pension contributions will not be the panacea the Government hopes it will be. Whilst greater retirement savings are to be universally encouraged, the benefits of the increase will be eroded significantly if it is not accompanied by a review of the default investment strategy of a DC pension scheme. “Our research indicates that the losses incurred from being in a poor-quality default fund negates much of the progress made by increasing contributions for a saver starting from scratch. The projected value of savings for a 22-year-old starting to save into a pension with 5% contributions using a poor-quality default fund is almost identical at age 55 if that person continued on the current 2% contributions and chose the best available default fund. “If scheme trustees and sponsors could take care to choose an appropriate, best performing investment arrangement, the outcomes for savers could be exactly the same without having to reduce their take home pay. The importance of choosing a good quality default strategy cannot be overestimated. “When auto escalation is implemented for schemes with strong investment governance arrangements, the combined effect of increased contributions and increased investment returns can create truly impressive results.”
The table below helps illustrate this: |
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Calling all BPA analysts! | ||
North West / hybrid 50/50 - Negotiable |
Principal Actuary - Bermuda | ||
Bermuda - Negotiable |
Financial Planning & Analysis Actuary | ||
London/Hybrid - Negotiable |
Apply Your Doctorate to Technical Pri... | ||
Fully remote / nationwide / hybrid working options all available - Negotiable |
Senior Investment Manager | ||
London / hybrid - Negotiable |
P&C Consultant | ||
London / hybrid 3dpw office-based - Negotiable |
Senior Pricing Actuary | ||
London - £140,000 Per Annum |
Actuarial Pensions Manager | ||
Flex / hybrid 2-3 dpw office-based - Negotiable |
Financial Reporting in beautiful Bermuda | ||
Bermuda - Negotiable |
Principal Risk Analyst - island adven... | ||
Bermuda - Negotiable |
Make a difference within BPA Administ... | ||
North West / hybrid 50/50 - Negotiable |
GI Provisioning in the Public Sector | ||
London or Edinburgh / hybrid 3 dpw office-based - Negotiable |
Associate Actuary - Risk Transfer Con... | ||
Flex / hybrid 50/50 - Negotiable |
Assumptions Actuary | ||
London/Hybrid - Negotiable |
Senior Actuary | ||
London/Hybrid - Negotiable |
Senior Investment Trainee | ||
London or Edinburgh / hybrid 50/50 - Negotiable |
Pensions Manager | ||
Any UK office / hybrid 2 dpw office-based - Negotiable |
Actuarial Reserving Senior Manager | ||
London / hybrid - Negotiable |
Senior Actuarial Consultant – GMPe | ||
Any UK Office location / Hybrid working - Negotiable |
Senior Life Actuarial Consultant | ||
London / hybrid 3 dpw office-based - Negotiable |
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