Schroders Defined Contribution old masters, new ideas
Old Masters, New Ideas was the theme of this year’s Schroders annual DC conference, held at the National Gallery in London and attended by over 190 pension scheme managers, trustees and consultants.
Old Masters, New Ideas was the theme of this year’s Schroders annual DC conference, held at the National Gallery in London and attended by over 190 pension scheme managers, trustees and consultants. Hot topics ranged from strategies to deliver stable growth, increasing certainty of outcomes and meeting the DC communication challenge.
As part of the conference Stephen Bowles, Head of DC, asked guests for their views on default design, member outcomes, contribution rates and downside risk management techniques. All of which led to some interesting results:
- When we asked our guests if they considered what the outcome of the member might be when designing a default investment strategy - 58% of responded said yes, 42% said they did not consider this when making the decision
- When we asked our guests what they considered would be a good outcome for members based on a percentage of their final salary? The overwhelming response, with 74%, said 50% of their final salary, 14% said 66% and only 12% said they would see 25% as a good outcome
- The most wide ranging responses came from the questions about How much do you think would need to be contributed by a 30 year old to achieve this good outcome at age 65 (% employers and employee contributions). The answers ranged from as little as 12% to as much as 50% of the salary. The answer of course, as many attendees sighted, is wide ranging as there are so many different variances to consider
- Based on what was presented at the conference, guests were asked about their thoughts on downside risk management techniques and if they felt they should be widely adopted in DC schemes? A staggering 93% of respondents answered positively about these techniques being included in a DC scheme
- Lastly when guests were asked about DC communication and if communicating more complex investment solutions was a barrier to these types of solutions being implemented, 75% of respondents agreed that it was a barrier with only 25% disagreeing with this
Stephen Bowles, Head of DC, commented:
“This is the fourth year that we have hosted a conference dedicated to Defined Contribution pensions and all the issues and challenges that come with managing and setting the investment agenda. This year has been our biggest conference to date, with around twice as many guests attending compared to 2012. This is indicative of the increased interest in DC across the board and I believe a reflection of the value that asset managers and Schroders in particular can bring to the DC debate. We look forward to unveiling our new ideas to the DC market in due course.”
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Schroders is a global asset management company with £236.5 billion (EUR279.7 billion/$359.2 billion) under management as at 31 March 2013. Our clients are major financial institutions including pension funds, banks and insurance companies, local and public authorities, governments, charities, high net worth individuals and retail investors.
With one of the largest networks of offices of any dedicated asset management company, we operate from 34 offices in 27 countries across Europe, the Americas, Asia and the Middle East. Schroders has developed under stable ownership for over 200 years and long-term thinking governs our approach to investing, building client relationships and growing our business.
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