A quarter of schemes not reviewed investment strategy since freedoms
Nearly a quarter of companies have still not reviewed their pension schemes' investment strategy in light of the April freedoms according to Willis Towers Watson's DC master trust, LifeSight.
Its research, Pension Design Survey, surveyed 160 of the UK's largest organisations on how pension schemes were responding to the pension reforms introduced almost a year ago.
Of the firms yet to review their investment strategy within the next year, almost a quarter (23%) planned to evaluate their structure in 2016. This showed that more work needed to be done in offering schemes products that meet the needs of trustees.
Over three-quarters (76%) of schemes had reviewed their default investment strategy. Trust-based schemes were less likely to have reviewed their strategy (15%) than contract-based schemes (32%).
Almost all schemes (98%) intended to review their at-retirement options and retirement support. Towers Watson expected competition to increase for products relating to these options.
Of those schemes intending to offer drawdown, just over half (53%) of contract-based schemes had already offered drawdown through the scheme, compared to only 5% of trust-based schemes.
Close to half (44%) of trust-based schemes had decided not to allow partial transfers, while only 18% of contract-based schemes were not allowing such transfers.
LifeSight managing director Fiona Matthews said: "The revolution in defined contribution (DC) provision has certainly started but there is still plenty of work left to do. At-retirement solutions for instance are only now becoming available. We expect competition to ramp up significantly with better product innovation and pricing."
She added: "The DC marketplace will continue to evolve rapidly and we expect more schemes to move away from being trust-based and head towards a more outsourced model of master trust or contract based.
"The anticipated changes in the March Budget are only likely to accelerate the pace. In order to remain competitive, employers should be looking to the full market alongside their existing pension providers to ensure that their schemes continue to offer the best value and full flexibility for their employees."
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