42% have never changed their DC pension investments

Almost half (42%) of respondents have never made a change to their defined contribution (DC) pension investments, according to research by AllianceBernstein.

Its Defined contribution survey, which questioned 500 employees who save into a DC pension, found that 22% believe changes to pension investments are not their responsibility.

The research also found:

  • 55% of respondents either do not open or only skim read the letters and emails circulated by their pension provider.
  • 41% of respondents believe it is sufficient for their DC pension investments to be monitored for adjustments at least once every six months.
  • 73% of respondents either have no idea or just a vague idea of the date they will retire.
  • 53% of respondents aged over 55 are unsure of their retirement date.

Tim Banks (pictured), managing director, pensions strategies group at AllianceBernstein, said: “Our research reveals significant uncertainty in DC members’ expected retirement dates.

“As peoples’ retirement plans change, through early retirement or delaying full retirement beyond state retirement age, employers and trustees must ensure their chosen investment strategy is flexible enough to adapt to their changing needs. 

“Unfortunately, the majority of DC default funds today are geared towards a fixed retirement date, selected by members as they join the scheme.

“In order to meet today’s working environment, default investment strategies need to offer flexibility around members’ retirement dates, and provide for a smoother, more gradual de-risking process as they grow older.”