• Share
•  Delicious
•  Digg
•  Facebook
•  LinkedIn
•  Reddit
•  Twitter

联系 Mags Andersen
电话 +44 20 7178 3513

			以电子邮件发送本页				打印

United Kingdom
London, 8 May 2009

Mercer has welcomed PADA’s discussion paper on investment* as a ‘coming of age’ for defined contribution (DC) pension schemes, and has expressed support for the proposals which appear to focus on the people who matter most – the members.

PADA’s proposals recommend a stable and secure fund structure reflecting the typical member’s likely degree of risk aversion, which should allow members to benefit from a clearer picture of the progress of their fund. Mercer believes that it also makes the level of risk taken by the member clearer, so that comparison with the benefits that could emerge from a similarly financed defined benefit (DB) scheme will be more straightforward, and that PADA’s investment design will encourage trust and confidence.

Brian Henderson, a principal in Mercer’s investment consulting business, commented: “DC has for too long been hiding in the shadow of more mature DB schemes. Historically, the DC market has developed reactively following the closure of DB arrangements, sometimes without any material consideration as to how the design should be managed in the context of the transfer of investment risk from employer to employee.

“PADA is likely to provide a benchmark that private scheme members will be able to compare their own benefits against and that providers will need to compete with, he continued. “We also anticipate the introduction of new and more efficient active strategies to challenge the use of passive management as the low risk, low cost solution in all market cycles, both within and outside personal accounts.”

“We should not dismiss lifestyle as an investment strategy either, as administrators compete against managers of target date funds to provide more efficient, more transparent and more flexible approaches,” commented Mr Henderson.

 “With a collection of progressively risky or higher returning funds, members will be able to select funds that better reflect their own ability and appetite to take risk in the longer term. Giving members the flexibility to build up risk from a stable base is something we support and is an area where we would encourage a more open dialogue. Not only will this approach improve transparency to members auto-enrolled in personal accounts; it should also provide greater certainty around each member’s final benefit, given their personal circumstances,” he concluded.  

以电子邮件发送本页

打印

联系 Mags Andersen
Mercer Press Office
电话 +44 20 7178 3513