UK - In 10 years' time, there will be no defined benefit schemes as we know them now, according to Gerald Hough, managing director for European and Middle Eastern pensions at Deutsche Asset Management (DeAM).
Speaking at DeAM’s ‘Investing with Insight’ conference in London, Hough said that final salary schemes are generally restrictive and many of them will change to a DC arrangement because of costs, regulations and employee demand.
“DB schemes are a good option if you have been with a company for 30 years,” he said.
“They are geared for full life employment but are poor value for an ex-employee who has left the company before his set retirement date.”
Hough said that because of the move towards DC schemes, employees need to be properly informed of how their investments are performing. He added that 80% of employees in DC schemes do not have an active role in fund manager selection and do not know enough about their fund managers.
By Janet Du Chenne