Aegon plans £20m in DC proposition

Aegon is planning a £20m investment in its workplace pensions proposition, aiming to improve functionality and to further integrate the BlackRock DC business into its offering.

In a statement published alongside Aegon’s results, UK chief executive Adrian Grace said the provider intended to target larger employers with master trust and investment only services.
The results showed Aegon spent €25m (£22m) in the fourth quarter of 2017 on the integration of Cofunds and BlackRock’s defined contribution business. UK pensions earnings in 2017 were flat at €9m (£8m).
Grace said: “Workplace savings are a hugely important element of our business and there’s no doubt the majority of people will accumulate much of their long-term savings through their workplace pension. The acquisition of BlackRock’s DC business has given us the ability to better serve large employers with master trust and investment only services. We have plans to invest around £20m over the course of the year to build on our workplace proposition with improved functionality and ensure its continued compliance with new regulation.
“Many workplace savers will go on to have financial advice needs and that’s why we believe it’s so important to have a platform from which customer can move easily between workplace and advised propositions. 
“The big unknown for the government, employers and the pensions industry is how the millions of people currently paying the minimum auto-enrolment contributions will react to April’s rise in contribution levels. The government has been coy about what they’d consider a successful outcome but are surely hoping any significant spike in leavers and opt-outs is avoided. The timing of the stock market correction is unfortunate given the headlines it’s creating about investing, but for savers with a long time horizon, there’s no cause for concern.
“With further contribution increases on the cards in the near future, now’s the time for Government, industry and employers to work together to highlight the value of workplace pensions and the ‘free money’ employer contributions and tax relief represent. At the same time, we need to find ways of extending default private pensions to the self-employed and gig economy to avoid them becoming second class pension citizens.”