Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • November 2015
11

JLT: poor auto-enrolment schemes "could cost members £500k"

Open-access content Monday 16th November 2015 — updated 9.24pm, Wednesday 6th May 2020

Auto-enrolled defined contribution members in poorer-performing schemes could lose up to the equivalent of £500,000 over a lifetime.

That finding has come from research by JLT Employee Benefits, which revealed the performance of the top 10 defined contribution (DC) default funds has ranged from around 3.5-9.5% a year over the last three years.

It said this meant that those auto-enrolled into the lowest performing funds have lost the equivalent of six percentage points compared to those in the best-performing funds. 

Volatility also differed sharply among the top 10 funds, ranging from 5.3-11.3%, which the company said showed the importance for companies to choose the best default strategy and provider for their employees when setting up a DC pension scheme, and to then monitor performance.

Maria Nazarova-Doyle, JLT Employee Benefits head of DC investment consulting, said those in less well performing funds could see "a huge, irreversible repercussion on members' financial position at retirement.

"While there may be a very good reason why a certain provider/default strategy is selected, it is paramount that this decision is reviewed regularly in light of the default's risk adjusted performance, as well as changes in regulations, scheme demographics and wider investment universe."

She said this problem was far more significant than that of investment fees, even though the latter attracted greater attention.

This article appeared in our November 2015 issue of The Actuary.
Click here to view this issue
Filed in:
11
Topics:
Pensions

You might also like...

Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Senior Underwriting Risk Manager

London (Central)
£85K-£95K + Benefits
Reference
124386

Reserving Manager (Contract)

London (Central)
£1200 - £1400 per day
Reference
124385

Life Actuary - Contract - IFRS 17 Financial Impact

England, London / England, Bristol / North Yorkshire, England
£900 - £1150 per day
Reference
124384
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2022 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ