DC revelations
UK - Nearly two thirds (61%) of trustees on defined contribution (DC) pension fund boards think their members do not know how much their pension is worth, according to Aon Consulting.
Aon's survey showed whilst just under 80% of trustees were confident they had an understanding, only half this amount (39%) felt the same to be true of their members thus revealing a serious gap in communications.
However, when trustees were asked about key challenges facing their pension funds, communication with members came out second to investment as the most important issue.
Helen Dowsey, principal at Aon Consulting 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."
Dowsey continued: "Although the findings show that this issue is acknowledged by some trustees, it is clear it needs to become more of a priority."
The majority (77%) ranked keeping investment options suitable for members as the most important issue.
Only 37% thought member communication to be the most important issue and 35% thought administration challenges.
In other DC news, Fidelity International has become the first DC pensions platform to introduce straight through processing (STP).
The move was initially launched in tandem with one administrator and should be rolled out to additional administrators throughout 2008.
STP would involve the automated transmission and processing of dealing instructions and information. Using SWIFT, a leading provider of electronic messaging solutions, Fidelity would provide administrators a more efficient, faster and lower risk solution for client transactions.
Colin Williams, executive director of DC business, Fidelity International, said: "The exponential increase in investment transaction volumes in the DC market means that those that aren't able to operate STP will face a significant increase in costs and risks."
However, when trustees were asked about key challenges facing their pension funds, communication with members came out second to investment as the most important issue.
Helen Dowsey, principal at Aon Consulting 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."
Dowsey continued: "Although the findings show that this issue is acknowledged by some trustees, it is clear it needs to become more of a priority."
The majority (77%) ranked keeping investment options suitable for members as the most important issue.
Only 37% thought member communication to be the most important issue and 35% thought administration challenges.
In other DC news, Fidelity International has become the first DC pensions platform to introduce straight through processing (STP).
The move was initially launched in tandem with one administrator and should be rolled out to additional administrators throughout 2008.
STP would involve the automated transmission and processing of dealing instructions and information. Using SWIFT, a leading provider of electronic messaging solutions, Fidelity would provide administrators a more efficient, faster and lower risk solution for client transactions.
Colin Williams, executive director of DC business, Fidelity International, said: "The exponential increase in investment transaction volumes in the DC market means that those that aren't able to operate STP will face a significant increase in costs and risks."
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