The personal accounts delivery authority should consider using ‘target date' funds instead of a ‘life-styling' approach, for the default fund of the new system, claims a new report.
In the 58-page document: ‘Dealing with the reluctant investor: Innovation and governance in DC pension investment’, the Pensions Institute at Cass Business School, suggests default funds in defined contribution (DC) schemes need to become more ‘innovative’. The authors - Alastair Byrne, David Blake and Debbie Harrison – argue employers, scheme providers and advisers must take a greater responsibility for the design and communication of the default fund as this is where around 90% of members invest their contributions. But the report says while typically 90% of DC members accept the defa...
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