23% have yet to review schemes in light of pension freedoms

Fiona Matthews-Willis Towers Watson-2016Almost a quarter (23%) of respondents have yet to review their pension scheme investment strategy since the pension freedoms were introduced in April 2015, but plan to do so this year, according to research by Willis Towers Watson.

Its Pension design survey, which surveyed 160 of the UK’s largest organisations, also found that 98% of respondents intend to review their at-retirement options and available retirement support.

The research also found:

  • Among respondents which intend to offer drawdown via their pension scheme, just over half (53%) of contract-based schemes already offer drawdown, compared to 5% of trust-based schemes.
  • More than three-quarters (76%) of respondents have reviewed their default investment strategy. Among those that have not, 15% of trust-based schemes have yet to do so, compared with 32% of contract-based schemes (32%).
  • 44% of respondents with trust-based schemes have opted not to allow partial transfers for  members, compared to 18% of contract-based schemes.

Fiona Matthews (pictured), managing director at Life Sight, Willis Towers Watson’s UK defined contribution (DC) master trust, said: “The revolution in DC provision has certainly started but there is still plenty of work left to do. At-retirement solutions for instance are only now becoming available. We expect competition to ramp up significantly with better product innovation and pricing.

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“The DC marketplace will continue to evolve rapidly and we expect more schemes to move away from being trust-based and head towards a more ‘outsourced’ model of master trust or contract-based [arrangements]. The anticipated changes in the March Budget are only likely to accelerate the pace.

“In order to remain competitive, employers should be looking to the full market alongside their existing pension providers to ensure that their schemes continue to offer the best value and full flexibility for their employees.”