Violent swings in markets discourage ordinary savers in defined contribution schemes according to PP research
Elsewhere in this week's Pensions Buzz, respondents said the timing of the EU referendum would not have a major effect on UK pensions.
Respondents also said the best way for trustee boards to avoid group think was to be sceptical and not shy away from asking hard questions.
There were 131 respondents in this week's survey.
More than half of respondents believed volatility in the stock markets deters ordinary defined contribution (DC) savers but many said it also drives short termism and poor decisions among savers.
"I saw scheme members move into cash after the market plunged in October 2008. Some of them had never switched before and I suspect some of them are still in cash today, having forgotten that they switched. So yes, a volatile market deters, but it also makes some savers make really bad decisions," said a pundit.
Conversely 31% disagreed with one respondent saying anyone who was 'investment aware' could invest well.
Another said apathy was a major deterrent while another observed: "The majority of members are invested in the default fund and pay no attention to investment performance. They should be bothered and should be encouraged to make active investment choices. There should also be a reasonable range of funds on offer."
One in seven was undecided.
The timing of the European referendum will make no difference to the UK pensions system according to 51% of respondents.
Some said governments would continue to meddle whatever the result of the referendum while others viewed both issues as unrelated.
A commentator said: "It'll be just like the Scottish referendum - we'll vote narrowly to stay in Europe, and spend the next ten years regretting our decision."
Another said the timing of the referendum was unimportant but the result was that staying in the EU would be better for UK pensions.
A fifth said it would be better if the referendum were held sooner. "[I] generally believe that the sooner the decision is made we remove uncertainly (whatever the outcome is) and investment markets prefer the known to the unknown," said a respondent.
Nearly one in ten said it would not be better for UK pensions if the referendum was held in 2016.
Just over a fifth was undecided.
Trustees can best avoid group think by using a combination of different techniques rather than one according to almost half (47%) of respondents.
These included: have someone roleplay as devil's advocate, have decisions reviewed by an independent sub-committee, appoint a fiduciary manager, and listen to consultants.
Nonetheless the main theme which emerged was that trustees should be sceptical and ask hard-hitting questions.
A commentator said: "The most effective boards are ones where individual trustees put their head above the parapet and ask questions. It should not be done for the sake of it however."
Another argued there should always be someone on the trustee board who has the ability to question and challenge consultants and other advisers.
Just under three in ten suggested other methods to boost governance including having diversity on boards and having a wide network of external contacts to get outside input.
One in eight suggested listening to consultants while 10% argued having a trustee roleplay as devil's advocate would be effective.
Only 2% said having decisions reviewed by an independent sub-committee and 1% said appointing a fiduciary manager were the ways to encourage thinking among trustees.
The industry was split on whether more pension data on how people made their decisions would help politicians craft better legislation with 41% saying it would and 40% saying it would not.
Among those who believed better data on consumers could help politicians, some respondents suggested that it could help trustees and administrators as well.
A commentator said: "So should trustees and DC product developers. The lack of thought that is going into DC design, in particular around the decisions people make, is sad to see. I would go further and suggest that how people make decisions generally should be factored into the design of schemes as the member journey is mapped out."
In the ‘no' camp, a sceptic said there was plenty of data out there but politicians would craft legislation which suited their own short-term goals regardless of what was best for the country.
Around a fifth was undecided.
The proposal to replace the LGPS with a DC scheme run by the National Employment Savings Trust (NEST) was endorsed by 42% of respondents.
Reasons for doing so ranged from reforming public sector schemes generally and that DC arrangements were a "no-brainer" for the country.
A supporter of the idea said: "Long overdue and it would ease the burden on local councils across the land who have a large number of staff who just won't move for fear of losing their pension entitlements."
Another said costs had to be controlled somehow.
Just under four in ten took the opposite view. One respondent questioned why NEST specifically should run the LGPS scheme.
Striking a more personal note a respondent said: "I never agree with anything Michael Johnson comes up with. What would happen to the billions already in the various LGPS funds? If you transfer all the investments to NEST you're just moving the problem sideways. If you sell all the investments you skew the markets horribly."
A fifth was unsure.
To see the results in full click here.
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