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Survey Report

FTSE 350 Defined Contribution Pension Survey 2020

Steering towards greater member support

By Gemma Burrows and Roy Edie | July 13, 2020

This is the fifthteenth edition of our FTSE DC Pension Scheme Survey, and the fifth coverage to the FTSE 350.
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First and foremost, we would like to convey our thanks to all those who participated in our survey during this unprecedented period. We know the many challenges facing both individuals and organisations. The time that has been spent providing us with this valuable information is much appreciated.

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About this survey

This year’s survey covers 224 of the FTSE 350 companies. This represents 90% of the eligible companies in the FTSE 350 Index as at the end of 2019. This excludes investment trusts and overseas companies that form part of the index but without a material workforce in the UK.

Most companies assisted by completing our survey questionnaire, while information on others was obtained from within our own organisation or by using details available in the public domain. Consequently, we do not have full data for every single question and graphs are representative only of the data we have for each question.

Limitation of reliance

In preparing this report we have relied upon information supplied to us by third parties which by necessity, may have been shortened or abbreviated. While reasonable care has been taken to gauge the reliability of this information, we are unable to guarantee the accuracy or completeness of that information, and we cannot therefore be held liable in this regard, including as to the misrepresentation of information by third parties involved.

This report is based on data/information available to us at the date of the report and takes no account of subsequent developments. This report is intended to be used for general marketing purposes and is not a substitute for specific professional advice. It may not be modified or disclosed to any other party without our prior permission, except as may be requested required by law. This report is not intended by us to form the basis of any decision by a third party to do or omit to do anything.

At the time of collecting data for this survey, we were at the very beginning of the COVID-19 pandemic, and it’s fair to say that any longer-term effects this will have on Defined Contribution (DC) provision will only be known as time unfolds. The market turbulence will bring the opportunity to ‘stress test’ current investment strategies, and the challenges we have faced will likely prompt reviews to current practices and provision.

Our 2020 survey reflects relative consistency and stability since our previous survey. The high contribution levels from last year that were driven by the raising of auto-enrolment minimums have been maintained and there is little evidence of major changes in plan design.

A number of key themes have been drawn out of this report which we will explore in greater detail:

  1. 01

    Plan design – and the move towards master trust

    There has been a slowdown in scheme changes, particularly within the FTSE 100. However, there is still evidence of Plan sponsors looking to consider the vehicle they use for their DC provision and an increased focus on how design elements can support improved member outcomes.

  2. 02

    Financial wellbeing – increasing flexibility

    Financial wellbeing continues to be an area of importance for organisations, and seems to be most prevalent amongst those that have adopted bundled solutions; master trusts in particular.

  3. 03

    Investment – default development and ESG

    Many schemes have already altered their default designs moving towards targeting drawdown or a balanced at retirement outcome. The implementation of ESG has been firmly on the agenda with many looking to incorporate this into the default or seeing it delivered through adding more self-select options.

  4. 04

    At retirement – improving member support as retirement approaches

    We have seen a steady reduction in pension scheme charges which will have a positive impact for members and the value of their savings at retirement. Our results show that FTSE 350 companies are looking to review the services that are made available to members, particularly in the run up to retirement, thereby further improving member outcomes at the point of access.

We believe this survey report to be the market leader in giving the clearest representation of DC pension provision in the UK. Whilst the results are based on information from some of the largest publically quoted companies in the country, they are relevant to any employer with a DC pension arrangement.

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FTSE 350 DC Pension Survey 2020 PDF 1.5 MB
Contacts
Gemma Burrows
Director, Retirement
email Email
Roy Edie
Director, Retirement
email Email phone T +44 1737 241144
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