PensionsEurope sets out principles for securing good member outcomes in DC schemes
Written by Natalie Tuck
Pensions Europe has set out six key principles for ensuring good member outcomes in defined contribution schemes, in a new report, published today.
The report, Principles of securing good outcomes for members of defined contribution pension plans throughout Europe, is part of two new reports published at its annual conference in Brussels today.
The report discusses the evolution of DC pension plans, and specifically considers what a good outcome for the pension system might be and sets out the principles that will support this.
These include plan design, communications, administration, investments, costs and charges, and, decumulation. For example, PensionsEurope said plans should be designed with good member outcomes in mind and focus on the needs of participants in retirement.
Communications should be clear so that participants can understand the benefits of the plan and, where they have to make choices, they can do so on an informed basis and appreciate the impact of the choices they are making.
With regards to administration, PensionsEurope said for DC plans, systems needs to rebust and ensure benefits are accurate. Investments should be appropriate and suitable to the members’ needs. Where the members have to make choices they should be provided with assistance that enables them to make informed choices.
Furthermore, PensionsEurope said costs and charges should be appropriate and should represent value for money and retirement options should be appropriate and, where members have choices to make, the impact of those choices should be clear.
Commenting, PensionsEurope chair Janwillem Bouma said: “We are delighted to be hosting our annual conference in Brussels this week – entitled “Security in an uncertain world: the role of pension schemes in 2017 and beyond”. Attracting representation from over 20 countries, this event brings together leading thinkers and speakers covering the wide range of issues impacting on pension funds.
“PensionsEurope is a thought leader in Europe and we have designed these two reports to stimulate discussion and debate around defined benefit and defined contribution pensions. Good outcomes need to be at the heart the industry and we are confident that the thinking outlined in these publications will help the industry to develop going forward.”