The National Association Funds annual investment conference saw a change in Britain’s pension’s landscape. The conference is important as it allows people to focus on defined-benefit, final salary.
Other schemes were seriously considered at this year’s conference. The defined-contribution (DC) scheme is a clear rival for the traditional approach as more customers choose it over other options.
Ray Martin, chairman of the NAPF’S investment council, said as much in his opening address: “Half a dozen years ago, DC schemes barely got a mention at this conference. But they are nearly 500 billion pounds in assets now in the UK and we need to think about their investment options, and broader DC government.”
The global financial crisis saw a dramatic fall in funds as the rates fall and fewer people in the pensions industry. The industry is now keen to forge a head as it focuses on the future.
The Workplace Retirement Commission is expected to complete a report on the subject this summer with the final recommendations to come in October this year. The British government will review the document and decide whether or not they will implement the proposed recommendations. Pension Minister Steve Webb will likely scrutinise it before making the final decision.
The UK pensions industry is encouraged to think outside the square as companies create DC funds for new and existing customers. Traditional schemes were and are inappropriate as people do not have the knowledge and skills to make the correct finance decision now or in the future.
