EUROPE - Almost half of defined contribution pension schemes do not regularly review the range or number of investment choices they offer members, according to a survey from Mercer.
Members could choose between an average of 15 investment options, with some schemes offering a choice of over 100. However, 42% of schemes did not regularly review their investment choices.
Tim Burggraaf, a principal at Mercer, said: "With so many members in the default fund it is important to ensure the design of the default fund option is right for as many members as possible.
"Considering members pick up a large part of the cost of their pension, and also carry most of the risk, it is the employers' responsibility to keep an eye on fund selection and to proactively make changes when investments fail to deliver."
The survey, which covered 235 organisations across 133 countries, also found only a small proportion of Europe's defined contribution pension plans currently invested in member education.
When asked to list the top challenges facing their scheme, six in ten companies cited securing 'employee understanding' of their scheme and 'effective communication' as key issues.
Despite this, only a quarter of participating schemes offered financial planning services or investment advice to their members.
Additionally, while over 80% of schemes considered websites and personalised communication important in communicating with members, websites wereonly provided by just over half the schemes, while the majority (80%) still relied heavily on generic literature such as newsletters and brochures.
Burggraaf said: "Communication programmes need go beyond simply making information available. They should reach out to meet individual members' needs. A measure of successful schemes is whether their members are sufficiently educated to understand how much to save for retirement."
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