Jonathan Stapleton asks three leading DC scheme managers about the changes they are making to DC investment strategies in light of the pension flexibilities and charge cap which will come into force in April.
In last year's Budget, Chancellor George Osborne unveiled huge changes to the pensions system - changes which will give individuals far greater flexibility over what they can do with their pension pot.
From 6 April this year, people will be able to take their pension in any way they want from age 55, subject to their marginal rate of income tax in that year.
In addition to this, a defined contribution (DC) charge cap of 0.75% for the default funds of auto-enrolment pension schemes will come into force on the same date.
These two changes will mean many schemes and trustees are having to check their DC scheme's investment strategy - making sure default funds are fit for purpose in a post-Budget world and can also comply with the charge cap.
In addition to this, trustees and employers will also have to consider the options they offer scheme members at-retirement - whether they will allow in-scheme drawdown and other flexibilities or whether members will have to transfer elsewhere to take advantage of some of these options.
PP asks three leading employers - First Group's John Chilman, Total UK's Laura Perks and Wolseley UK's Neil McCawley (pictured l-r above) - how their DC investment strategy has evolved over the past year; the changes they have made in response to the pension freedoms or the charge cap; and what they still have left to do.
READ:
- How Wolseley UK is evolving its DC default fund
- Why Total UK is overhauling its default fund and undergoing a DC review
