Consolidation Conundrum: Unpacking the Future of Defined Contribution Pensions
The Labour government is keen to drive greater consolidation across all the different aspects of the pensions industry. This includes closed corporate defined benefit schemes, the Local Government Pension Scheme and auto-enrolled workplace schemes.
Throughout this whitepaper we take a closer look at how auto-enrolled pension schemes can be consolidated and made more efficient for the benefit of end members. When discussing consolidating defined contribution schemes, the focus is often on master trusts but we wanted to broaden the discussion and shine a light on other parts of the market, unpicking the individual challenges and opportunities of each.
The defined contribution market is highly fragmented with different types of schemes operating, many of which have existed before auto-enrolment came into force between 2012 and 2014.
This report looks in depth at the different providers operating in the defined contribution landscape and examines the issues in each and looks at where the best consolidation opportunities lie.
It also examines how consolidation can help greater investment in the UK, as well as how to address the creation of further small pots, how these can be consolidated and further ways to future proof the industry.
The views expressed in this article are those of the author(s) and not necessarily the views of FTI Consulting, its management, its subsidiaries, its affiliates, or its other professionals.
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