Latest research published via UK-based consultancy Hymans Robertson’s DC Master Trust Default Fund Review shows that defined contribution (DC) master trust members are demanding more from their funds.
Retirement outcomes for DC scheme members in master trusts have undoubtedly been impacted by recent market challenges with values slipping below pre-pandemic levels, the review showed.
The report covers the impact on anticipated member outcomes and asks what steps can be taken, noting that consideration needs to be given to what actions can and should be taken to support members, especially those in legacy arrangements or coming up to retirement.
The analysis also found that members are increasingly calling for ESG to be considered in their pensions schemes’ investment options.
Claire Roarty, head of DC provider relations at Hymans Robertson, said: “DC master trust members are demanding more from their funds with nearly a third of members expressing a desire for investment options which offer positive environmental and social impacts.”
Hymans Robertson launched the Climate Impact Initiative in 2021 to meet these demands and more DC savers than ever now have access to impact options. However, there is much work still to do and 42% of master trusts don’t offer impact investing options to members and have no plan for their inclusion – creating a gap between what members want and what the market offers, the firm added.
“With the DC market continuing to grow, it is imperative that providers put plans in place to introduce an impact choice and communicate this to their members. Improving member engagement must remain a key priority, particularly in the current market where longer-term savings like pensions can slip down the agenda. Providers must do all they can to encourage better retirement planning before it’s too late,” Roarty said.