PLSA Launches 43rd Annual Survey

Today, the Pensions and Lifetime Savings Association released the findings of their 43rd Annual Survey which provides a unique snapshot of workplace pension provision in the UK’s largest private and funded public sector schemes. 

Key findings outlined in the executive summary include: 

• Defined Contribution (DC) schemes reported that 88% of their main DC active members remain in their default funds. However, as in 2016, choice remains high, with schemes reporting a median number of 14 funds available. Although the number does vary between trust and contract based schemes, with trust based schemes offering on average 12 different funds compared to 55 in contract based schemes;
• Mean running costs reported by Defined Benefit (DB) schemes increased from £546 (2016) to £612 (2017) with costs driven by increase to levies, governance and trustee training as well as administration, record keeping and communications;
• For DB schemes, the overall contribution rate rose slightly to 33.6%. This is mainly due to a slightly higher employer contribution rate 28.0% (2017) compared to 24.2% in 2016. The mean employee contribution rate continued to be around 6.0% at 5.6%;
• The share of DB assets invested in equities continued to fall from 33% (2015) to 28% (2016) to 23% (2017).  The share of assets in fixed income and other assets increased to 47% (45% - 2016) and 30% (28% - 2016) respectively;
• Just over a third (34%) of DC respondents described their investment strategy for the growth phase of their main scheme’s default fund as passive tracker.  This was followed by multi-asset fund (26%), diversified growth fund (25%) and bespoke solution (21%);

Graham Vidler, Director of External Affairs at the Pensions and Lifetime Savings Association, commented: 

“As we await the publication of the Government's Automatic Enrolment (AE) Review, we have released our 43rd annual survey which highlights our members approach to workplace pension schemes.   It charts the growth of DC schemes as the dominant workplace pension option following the advent of automatic enrolment and highlights the stark difference between the amount of money flowing into DB schemes compared to DC schemes. 

“As part of our commitment to helping everyone achieve a better income in retirement, we launched a major new consultation – Hitting The Target – in October which proposes a set of national retirement income targets.  This consultation closes on the 12 January and we welcome input from interested parties as we work to build a retirement savings market which is truly focused on the end users.” 

-Ends- 

PRESS CONTACTS: 

Lee Blackwell, Head of Media and PR, Pensions and Lifetime Savings Association

T: 020 7601 1726, M: 07713 073023, E: [email protected]

Kathryn Mortimer, Press Officer, Pensions and Lifetime Savings Association

T: 020 7601 1748, M: 07901 007713, E: [email protected] 

METHODOLOGY: 

Research from the PLSA’s Annual Survey 2017 which was conducted between 5 June 2017 and 28 July 2017. 176 PLSA fund members responded; of these: 

• 135 had DB schemes;
• 127 had DC schemes;
• 2 were master trusts; and
• 26 were members of the Local Government Pension Scheme (LGPS).

Survey respondents represented over 6.5m members and held £526bn worth of assets.  DB Schemes (excluding the Local Government Pension Scheme) which responded reported a combined membership of approximately 3.1m members across 272 schemes (employers often have multiple schemes). This constitutes 28% of the 10.9m DB members reported by the Pension Protection Fund (PPF). 

NOTES TO EDITORS: 

We’re the Pensions and Lifetime Savings Association; the national association with a ninety year history of helping pension professionals run better pension schemes. Our members include over 1,300 pension schemes with 20 million members and £1 trillion in assets, and over 400 businesses. They make us the voice for pensions and lifetime savings in Westminster, Whitehall and Brussels. 

Our purpose is simple: to help everyone to achieve a better income in retirement. We work to get more money into retirement savings, to get more value out of those savings and to build the confidence and understanding of savers.