Best practice in defined contribution (DC) schemes is the subject of a new consultation paper published by the Investment Governance Group (IGG).
The IGG, a group of senior figures representing all parts of the private work-based pension environment, set up a subgroup to address the issue, and the consultation paper is the result.
The IGG is seeking to plug a gap in best practice in trust-based and contract-based DC schemes, with that type of pension expected to be used more and more following the introduction of auto-enrolment in 2012.
The proposals in the consultation paper aim to maximise the opportunity of a good outcome for members of work-based DC pension schemes irrespective of their legal structure.
The consultation paper puts forward principles, best practice guidance and a table of accountabilities that specify the characteristics of best practice in today’s DC pension environment.
Consultancy Towers Watson welcomed the publication of the consultation, so long as it is followed up by decisive measures leading to the provision of better DC pensions in the UK.
Paul Trickett, EMEA head of investment at Towers Watson, said: We believe this consultation is a positive step for one of the most neglected parts of the industry, however there does need to be a more concerted effort to register real improvements and quickly.”
The consultation period runs for 12 weeks and ends on May 5. To view the consultation paper, go here
Read more pension investment article