The scheme is provided by Standard Life and currently has 764 members.
Peter Harris, director of pensions at Telent, says: “We originally chose our default fund on the basis that we did not expect our membership to be financially sophisticated, and therefore a lifestyle profile with a diversified growth fund in the early stages, switching to annuity matching in the later phases provided a good ‘vanilla option’.
“Three years on, we have decided to change the default to a risk-based fund, with the same lifestyle profile but with a fund approach aiming to reduce volatility by widening the opportunities to diversify.”
An investment committee was formed, comprising Harris, the HR director, the chief information officer for the legacy defined benefit (DB) plan and a member-nominated representative.
Harris says Telent has spent a lot of time talking to staff. “While for many of them a move from DB to defined contribution (DC) was unwelcome, the general perception is that the DC offering is a good-quality product,” he says.
“However, one of the things that keeps me awake at night is whether staff have a sufficient understanding of their pension arrangements, so any value judgement by members must be considered with this in mind.”
