AE has been moderately successful, says industry
Respondents say there has been some success with automatic enrolment (AE) but members are still not saving enough.
Over 40% of respondents said that auto-enrolment (AE) has been moderately successful, five years after it was introduced.
Of those, one said it has been a success as more people are saving, but it has driven down employer contributions for those employees who want to save.
Just under a third said it has been very successful, with one saying: "Given initial concerns as to opting out - the results to date are commendable - making sure the members continue to contribute and do so to the level that ensures a meaningful retirement pot."
A further 23% said it has been a mixed success, with one respondent arguing: "It's raised awareness but people now think they are saving enough when they are not."
Another said although coverage is good, contribution rates must rise and member engagement and retirement defaults must improve.
Just 1% said AE has been unsuccessful, while 2% said it has been very unsuccessful.
A third said the next significant financial crisis will be in three to five years' time.
One respondent said incomes will be squeezed when interest rates rise and the minimum contribution under AE is implemented in 2018 and 2019.
Just under 30% said they believe a crisis will hit within two years, with most respondents arguing this will be down to Brexit.
Just under 10% said the next significant financial crash will be in six to 10 years' time. One respondent commented: "I think we're on a long-term low growth phase rather than a crisis. Three or so years post-Brexit we should see an increase in growth."
Some 3% said a crisis will hit in 11 or more years' time, and just 1% said we will never return to the old boom and bust.
Just over 25% said they do not know, with one saying "if we knew, we could avoid it".
Just under half (48%) of respondents agreed there should be a statutory override to allow defined benefit (DB) schemes to switch inflationary increases to the Consumer Prices Index (CPI).
This would solve the current situation where most schemes have the Retail Prices Index (RPI) hardwired in their scheme rules, and are therefore unable to move to CPI despite the government believing it to be the more appropriate inflation measure.
However, some respondents said schemes should only be able to switch if the sponsoring employer is stressed, and if the trustees felt it necessary.
Of those who said yes, one said: "A guarded yes. The original intention of many DB schemes was to provide inflation-linked increases. So, I support using the most appropriate inflation measure - could be CPI."
Another said: "If it avoids schemes closing or becoming insolvent, yes. When these schemes were set up, the intention was to protect the purchasing power of pensions and RPI, the only measure at the time, is now discredited as a means of doing that anyway."
Some 45% said no, with one saying definitely not, as a promise was made to people and should therefore be kept.
Just 7% did not know, with one commenting: "Switching to CPI has a positive impact on the scheme but less so for the member."
A third of respondents said the single most important factor employers and trustees should look at when considering defined contribution (DC) master trusts is value for money.
One said: "A value for money analysis ought to be holistic and include considerations of scale and quality of administration and therefore should incorporate the other considerations set out here."
Almost 30% said the quality of the administration is the most critical factor, with many pointing out that this is pivotal to protecting members.
Of those, one said: "Assets can be great, but if the benefits and investment administration is poor then members will be at risk."
Just under 10% said employers and trustees should look at the quantity of assets under management when considering master trusts.
Some 3% agreed the most important factor is cash flow, and only 1% said the number of existing members.
A quarter answered ‘other', giving reasons such as quality of governance, a mix of the above, and whether a DC master trust will survive.
Over half (54%) said that the need to fund defined benefit (DB) schemes is affecting the ability of employers to offer a pay rise to workers.
Of those who said yes, one said: "Given the amount being paid to reduce deficits, it has to be having a negative impact on wages."
Another said: "Of course it is, but not every employer would use that money to increase pay."
However, 22% answered no, with one saying that with so few DB schemes open to new accrual, there is no real link between the two.
Just under a quarter (24%) were undecided. Of those, one said: "It depends on the employer and the proportionate ratio value of the DB scheme and its deficit to the employer size / turnover / profitability."
Another said: "For some it may be the case, for others it is a convenient excuse. There is little restraint at executive level."
For the full results, click here.
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