Member fees will increase if investment guarantees are introduced into workplace defined contribution schemes, MetLife Europe warns
The pension provider said a rise in employee concern about DC scheme performance has piqued finance director's interest in introducing investment guarantees, but the cost would be passed on to the member.
A MetLife poll of 207 finance directors showed 22% had seen a rise in concern about pension performance.
And about 11% said they thought guarantees would increase employees' confidence in their pension scheme while 8% believed they would convince new employees or other non-members to join.
At present investment guarantees - which have been successful with personal pensions - are not available in DC schemes but MetLife said they could soon become part of corporate pensions - if finance directors introduce them to DC plans at the expense of the scheme member.
MetLife Europe UK branch managing director Dominic Grinstead said: "Investment guarantees could have a role to play in corporate pensions as they would provide reassurance to members that their fund will be protected from volatility which would be particularly valuable in the run-up to retirement."
He added: "Companies are reporting increasing concern from staff about the performance of their pension schemes following the volatility of the past 18 months. People investing in DC schemes will have seen falls of up to 20% in the value of their funds in the past year even though the market has now shown signs of recovery."
Caring for children and elderly relatives
Similar to June 2007
Square Mile’s series of informal interviews
Fine reduced to £60,000
Two roles created