How three employers are tailoring their default funds to tackle the retirement freedoms and charge cap

clock

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:

Why First Group is considering adopting a multi-default fund strategy for the First UK Bus Pension Scheme

- How Wolseley UK is evolving its DC default fund

Why Total UK is overhauling its default fund and undergoing a DC review

More on Defined Contribution

Will the Pensions Review herald long overdue integrated policy making?

Will the Pensions Review herald long overdue integrated policy making?

Stephanie Hawthorne asks the industry what should be the Pension Review’s priorities?

Stephanie Hawthorne
clock 24 October 2024 • 12 min read
Three key policy asks to ensure better decumulation outcomes for savers

Three key policy asks to ensure better decumulation outcomes for savers

Standard Life sets out its wishlist for decumulation reform

Jonathan Stapleton
clock 24 October 2024 • 3 min read
PLSA 24: DC consolidation must be in the members' best interest

PLSA 24: DC consolidation must be in the members' best interest

Industry panel says efforts to address adequacy and consolidation efforts must be right for savers

Martin Richmond
clock 17 October 2024 • 3 min read
Trustpilot