mast image

Special Report

Impact investing

Sections

Adequacy: the all-important question

Related Categories

How do you measure success when it comes to pension reform? In the UK, it is clear that the government measures the success of auto-enrolment by some numbers, but not others. 

Occupational pension scheme membership exceeded 45.6m in 2018, a new record, according to data published by the Office for National Statistics (ONS) in June. Pensions minister Guy Opperman claimed credit for the ruling Conservative party.

“These figures show, once again, just how successful the government’s pension reforms have been,” he said last month – ignoring that auto-enrolment was introduced by the last Labour government and rolled out under the Conservative-Liberal Democrat coalition. 

Opperman also claimed that the ONS’ data “tell a story of millions of people now building a pension pot for their future and looking forward to a better retirement”.

<

But does it? ONS figures showed that contributions to DC schemes were just 5.1% on a weighted average basis last year, compared to 25.6% for DB schemes. Prior to auto-enrolment, the average DC contribution was 11% of salary, according to consultancy firm Buck. 

These numbers could imply that employers have taken the opportunity presented by auto-enrolment to pay the minimum required by law. This was predicted by experts years ago when auto-enrolment legislation was first drafted.

Millions of UK savers may well be looking to a better retirement, but they will not get one unless policymakers acknowledge that getting people through the door is just the first step. Those designing and overseeing auto-enrolment systems elsewhere in Europe should take heed.

Nick Reeve,
News Editor
nick.reeve@ipe.com

Have your say

You must sign in to make a comment

IPE QUEST

Your first step in manager selection...

IPE Quest is a manager search facility that connects institutional investors and asset managers.

  • QN-2548

    Asset class: Fixed Income, Emerging Market Debt Hard Currency (Active).
    Asset region: Emerging Markets.
    Size: CHF 300-400m.
    Closing date: 2019-07-30.

  • QN-2549

    Asset class: Fixed Income, Emerging Market Debt Hard Currency (Passive or Passive Enhanced).
    Asset region: Emerging Markets.
    Size: CHF 300-700m.
    Closing date: 2019-07-30.

  • QN-2550

    Asset class: Fixed Income, Emerging Market Debt Local Currency (Active).
    Asset region: Emerging Markets.
    Size: CHF 250-350m.
    Closing date: 2019-07-31.

  • QN-2551

    Asset class: Fixed Income, Emerging Market Debt Local Currency (Passive or Passive Enhanced).
    Asset region: Emerging Markets.
    Size: CHF 250-350m.
    Closing date: 2019-07-31.

  • QN-2552

    Asset class: Fixed Income, High Yield (Active).
    Asset region: High Yield (US).
    Size: CHF 500-600m.
    Closing date: 2019-07-29.

  • QN-2553

    Asset class: Fixed Income, High Yield (Passive or Passive Enhanced).
    Asset region: High Yield (US).
    Size: CHF 500-1'100m.
    Closing date: 2019-07-29.

  • QN-2554

    Asset class: Global Real Estate (Equity, unlisted Funds).
    Asset region: World (ex-Switzerland).
    Size: CHF 200 mn (potential for further growth).
    Closing date: 2019-08-07.

  • QN-2555

    Asset class: Real Estate.
    Asset region: European.
    Size: EUR 50 - 100 million.
    Closing date: 2019-07-22.

  • QN-2556

    Asset class: FX Hedging.
    Asset region: Global.
    Size: Mandate size of CHF 1.5 bn.
    Closing date: 2019-08-09.

  • QN-2557

    Asset class: All/large Cap Equities.
    Asset region: China A-shares.
    Size: Unit linked platform (0m USD in initial investment).
    Closing date: 2019-08-01.

Begin Your Search Here
<