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Jonathan ParkerHead of Defined Contribution& Financial Wellbeing
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Welcome to the third quarter edition of Defined Contrarian for 2023. The big pensions news over the summer was of course the Mansion House package of proposals, but we cannot ignore the successful passage of the Private Members’ Bill on extending auto-enrolment (AE) coverage. Although the effective date for the AE changes is still to be agreed, this represents a major boost for lower earners and younger workers, who will be brought into the pensions system for the first time.
One of the consultations launched as part of the Mansion House package was on decumulation, with proposals laid for strengthening trustee duties to support DC members as they approach the critical ‘spending’ phase of their pension journey. Alex White, co-head of Redington’s ALM team, has written extensively in recent years about potential improvements to investment and product design during DC decumulation. In this edition, he explores the subject further with ideas around a more adaptive approach.
Another theme over the summer was further consolidation within the master trust sector, with SEI acquiring National Pension Trust and Smart Pension acquiring Evolve Pensions. Paul Enderby outlines some considerations for employers when two large pension arrangements are brought together.
Finally, Celine Legaspi from our research team continues her exploration of nature-based solutions, where we are seeing clients starting to undertake market selection exercises. This coincides with the launch of the Taskforce on Nature-related Financial Disclosures (TNFD) framework and the critical work that came out of COP 15 in Montreal late in 2022.
As always, please do get in touch if you’d like to discuss any of the matters raised in this edition.
Before you get stuck in…