UK - Low paid workers investing in DC schemes should invest in high risk funds rather than lower risk options.
Mercer Human Resource Consulting partner Dick Strattan said DC members should take note of government schemes – such as the S2P and MIG – which guarantee workers a minimum standard of living in retirement.
Strattan said that if an employee was unlikely to get a pension bigger than this guarantee, he should invest in higher risk and potentially higher gain funds knowing that if the gamble did not pay off, then he would still have the government’s guarantee to fall back on.
This week's edition of Professional Pensions is out now.
The government is in talks with the UK and Irish pensions regulators over how to protect members of cross-border schemes in the event of a no-deal Brexit.
The equalisation of guaranteed minimum pensions (GMPs) is at least two years away from being completed, and could take longer than four years for some schemes, a poll has found.
The Pensions Regulator will consider if schemes should be required to have professional trustees and assess the case for greater regulation of administrators and system providers, PP can reveal.