UK – Actuarial consulting firm Lane Clark & Peacock is to launch a defined contribution scheme that targets a specified level of pension benefits - which it likens to a single-member defined benefit scheme.
“We’re putting together a DC investment package that targets a specific level of pension,” LCP partner Jeremy Dell told IPE. “It’s like a one-man DB.”
LCP’s new product is targeted at companies, whose employees will be advised on investments in a similar way to the trustees of a DB scheme. For example, younger workers could be advised to invest in equities then lock in the gains with bonds later in their careers.
Mellon Financial Corp. offers a product called DC Investment Plus, which includes a web site that provides investment advice.
Dell said LCP’s approach could lead to a specified level of pension in nine out of 10 cases – although people would have to give up some of the potential upside. Individual counselling would not be provided, though there would be online modelling and communications.
“We think there’s a pent-up demand for these kind of ideas,” Dell said. “This one’s been brewing for a couple of years.”
Dell said the product – dubbed DCisive - would go live in the next few months, and would be rolled out through the firm’s DC Link administration business. It would be used in LCP’s own scheme.
Dell said one client has already signed up, though he declined to name them.