mast image

Impact Investing

IPE special report May 2018


DC ‘too low’

UK employers offering defined contribution (DC) plans, contribute less to their employees’ pension than they would do if running defined benefit (DB) schemes, according to a survey by consultants Towers Perrin.
Based on the responses of 81 major UK employers, the survey highlights that only 4% contribute more than 15%to employee pension plans and 28% contribute less than 5%. The contribution rates of more than half of the participants are between 5% and 10%.
“Contribution rates to DC plans are often a lot less than the DB they have replaced. Typically, a good DB plan would cost employers upwards of 15% and with falling long-term bond yields and improving mortality, the position is worsening from the DC plan members’ perspective,” says Bruce Moss, principal at Towers Perrin in London. Only a few employers provide modelling and projection tools to enable employees to plan adequately, say the consultants.

Have your say

You must sign in to make a comment


Your first step in manager selection...

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

  • RE-2441

    Closing date: 2018-05-31.

Begin Your Search Here