Let's get DC right before it's too late

Altmann, Ros
September 2001
Journal of Pensions Management (1462222X);Sep2001, Vol. 7 Issue 1, p38
Academic Journal
The trend towards defined contribution (DC) pension provision in the UK is likely to accelerate in coming years. At the moment, trustees of DC schemes, their consultants and their members are not generally making best use of DC arrangements. Contribution levels are inadequate, investment options are not well-designed for the purpose, and DC pensions are, on current trends, likely to prove inadequate to support future retirees. In theory, DC schemes transfer investment risk to the individual; but, in practice, the ultimate risk lies with the state. The taxpayer will end up having to support many more people in retirement. Therefore, the industry urgently needs to address the issues relating to advice on contributions (and perhaps lengthening working life to allow sufficient sums to be paid in) and structuring suitable investment options (and improving financial education to enable people to understand how best to provide for themselves). Getting DC pension schemes working better will be to the benefit of us all.


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