A fifth (20%) of defined contribution (DC) pension schemes continue to report increases in members opting out or reducing contributions, according to research by Aon.
Its DC today survey, which is based around a regular pulse survey designed to track how DC schemes and their members are reacting to the current economic conditions, also found that 33% of respondents have provided additional support for their schemes and a further 25% are considering doing so.
Around two-fifths (39%) have provided some form of wider cost-of-living support for staff or are considering doing so, with 31% having put additional financial wellbeing support in place and 37% increasing communications around support already in place. A further 8% are considering adding extra support, while 19% have no plans to do so.
More than half (53%) of the pension schemes surveyed have either made, or are considering making, changes to their investment strategy in response to current economic challenges, while 38% of DC schemes have reported an increase in member queries or concerns about their investments.
Only 4% of DC schemes have increased allocation to private markets or illiquid asset investments, whereas 15% have increased allocation to environmental, social, and governance investments, with a further 20% currently considering this move.
Ben Roe, head of DC consulting at Aon said: “Since our first survey, we have seen an increase of 7% in the proportion of respondents providing additional retirement support. A number of respondents have reported that they provide a range of seminars to support members. In addition to this, we are also seeing more offering access to independent financial advisers, expert support to answer retirement questions and one-to-one support sessions.
“Providing additional support at retirement can help ensure DC savers are aware of the potential impact of any decisions they are making and help to reduce the risk of significant detrimental impact on their retirement income or of them falling victim to pension scams.”