The expert panel asked if pensions flexibilities are an opportunity or a curse for schemes


DC Insight welcomed three expert panellists to give their views on freedom and choice and what it has meant for them and their members thus far.

Tim Colvin, pensions & benefits manager, Vodafone, Mel Duffield, head of product strategy and liaison, USS and Shola Salako, pension fund manager, De Beers UK Pension Scheme talked to Annabel Duncan, vice president, UK defined contribution, J.P. Morgan Asset Management, about the decisions members are making, and how they are engaging them.

While all three panellists agreed that freedom and choice was initially an opportunity for the industry, they also highlighted the issues it has created for schemes in choosing providers, re-examining defaults and deciding which flexibilities to offer.

Workplace demographics are a cause for concern: Mel Duffield, USS, highlighted that in the DC scheme the company is currently designing, it is key for USS to take into account a broad membership.

Shola Salako, De Beers UK Pension Scheme, added: “The older population who also have DB assets may see their DC pots as a savings account – but there is a concern for the younger cohort who don’t have DB at all.”

“For the younger workforce, there are communication and engagement issues,” commented Tim Colvin, Vodafone. “Retirement is far off and they are uncertain about their future savings regime. The focus of trustees must be to get people saving.”

Tax implications of the freedom and choice were also a concern for the panellists – Duffield commented, “People don’t have a full understanding of the implications. They could be unknowingly creating tax issues for themselves when they make choices.”

With Salako agreeing that there needs to be more education in place, she advocated a face-to-face approach to communications, helping people to “talk, ask questions and engage with their savings.”