Our latest Defined Contribution pension scheme research covers the key aspects of workplace pension provision. We have identified five areas for focus to help deliver better outcomes for DC savers and employers.

Strategy and Design

• The most popular approach to pensions is to offer a benefit in line with competitors.
• The top priority for respondents is ensuring their DC Plan delivers good value for money.
• Nearly half are considering changing the structure of their DC plan to aim to help deliver better outcomes and to reduce the governance burden of running a DC plan.

Contributions and Adequacy

• The average default contribution rate remains at around 6 percent from the company and 4 percent from the employee, however there is a wide range between the highest and lowest rates across all schemes and between industry sectors.
• Only around one in three respondents know the expected pension outcome for a typical member of their DC plan.

Investments

• 8 in 10 monitor performance of individual funds against benchmarks, but only 3 in 10 monitor what this means in aggregate for a member invested in their default fund.
• One in ten schemes are currently investing in illiquid assets.
• Nearly half of schemes assess all of their investment options against ESG criteria.

Engagement and Wider Financial Wellbeing

• Three-quarters provide wider financial wellbeing support outside of pensions, or plan to provide this in the next two years.
• Offering an employee share scheme is around twice as popular as providing a workplace ISA.

At Retirement

• 35 percent of respondents currently have a preferred financial adviser firm to support members at retirement, with a further 15 percent planning to do so.
• Most DC schemes report that less than 10% of members have selected their own target retirement age, although 40% of schemes do not measure this.