CA Summit 2008: DC arrangements default fund concern

Delegates\' concerns about the quality of defined contribution arrangements default fund were shared by speakers.

Robin Ellison, a partner and head of strategic development, pensions at Pinsent Masons called for a complete overhaul of the current lifestyling models used, stating that many are based on actuarial models that were designed long before individuals lived 30 years into retirement.

“It is time to rebuild these things because they are still rather primitive,” he said.

But Andy Marchant, managing director, corporate pensions at Aegon Scottish Equitable said that given the vast majority of scheme members end up in the default fund the current model of equities into bonds is the “best assumption you can make”.

“The difficulties are around the size of the fund, the date they retire and whether they want to remain invested and I don’t think you can solve that with investment solutions, people need advice,” he says.