Predictions for UK workplace pensions in 2017
Susan Ring, Chief Executive of Capita Employee Benefits, shares predictions for UK workplace pensions in 2017.
We see the two defining trends of UK workplace pensions continuing unabated:
1. Employers will continue to seek to limit their exposure to their legacy of promised ‘defined benefits’ (DB) pensions while focusing future provision for employees in ‘defined contribution’ (DC) pension where the risks lie predominantly with the employee.
2. Employers will also seek to better control the costs of running pension schemes and to limit their fiduciary duties in respect of those schemes.
Because of this we expect:
- Downward pressure on administrative costs and a flight to scale operation
- Growing aggregation of DC assets into multi-employer ‘Master Trusts’
- Increased activity to ‘de-risk’ DB legacy pension schemes through the purchase of various forms of insurance instruments and buy-out policies
- Businesses will be focussing more and more on how to control the costs of running pension schemes. Technology will inevitably have a big role to play in generating savings, for instance through administrative automation and self-service digital solutions.