Whitbread removes investment choice

Whitbread removed investment choice from its trust-based defined contribution (DC) pension scheme because of concerns that employees’ lack of understanding was putting them off pensions altogether.

Speaking at the National Association of Pension Funds’ conference, Lesley Williams, group pensions director at Whitbread, said: “As trustees, we realised we were being unrealistic in expecting people to make investment choices.”

Feedback from employee focus groups also showed that people were afraid of investment choice.

In removing this choice, the company hoped to remove one of the barriers to employees joining the scheme.

Williams added the company also discovered that the scheme information booklet had been altered a few years ago, so that details of ‘adventurous’ investment funds were moved to the top of the relevant page, ahead of information about balanced investment options. As a result, investments in adventurous funds rose, which indicated members were selecting the first choice in the list, said Williams.

“I can’t stress enough the need to understand your employees,” she added.