Trustees failing to acknowledge scale of DC communication failings

The consultant’s survey – which polled over 120 trustees – found that, while just under 80pc of trustees were confident that they understood their scheme, only 39pc believed members had the same level of understanding.

However, the survey found 77pc of trustees believed keeping investment options suitable for members was a very important issue facing their scheme.

Only 37pc of trustees believed member communication was as important – ranking it on a par with administration challenges.

Aon Consulting said this revealed a "serious gap" in communications.

Aon Consulting principal Helen Dowsey said: "The gap between trustee knowledge over the estimated level of members’ projected pension pots and member knowledge is a big problem that needs to be addressed to ensure the future health and viability of the DC model.

"Although the findings show that this is issue is acknowledged by some trustees, it is clear it needs to become more of a priority."

She added: "Lack of member understanding holds significant policy implications for the government as it rolls out the new personal accounts system in 2012 to approximately 10 million individuals without an existing pension scheme.

"If members of company-sponsored DC pension schemes do not understand their benefits, then there remains a danger that these ‘enlisted’ pension scheme members will see the new arrangements as little more than another form of income tax."