How UK DC schemes are using technology for better communication & decision making Laura Myers – Lane Clark & Peacock IAPF Annual DC Conference 2016
How UK DC schemes are using technology for better communication & decision making Lau Laura M a Myers – LC LCP IAPF Annual DC Conference 2016
How technology has helped UK DC schemes’ challenges Good d Eve Ever Member mem ember er chang nging ng engag ageme ment outcomes out legisla le slation IAPF Annual DC Conference 2016
Estim imated ed t total a l activ ive D e DC member ership ip a and annual c l contrib ibutio ions 14,000 £35.0 12,000 £30.0 Vlaue of new annual contributions Number of active members ('000) Number of 10,000 £25.0 active DC members 8,000 £20.0 ('000) New 6,000 £15.0 contributions (£ billion) 4,000 £10.0 2,000 £5.0 0 £0.0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Date Dat Source: ONS and HMRC IAPF Annual DC Conference 2016
It’s been busy… Reduced Annual Guidance More TPR Allowance for those with Freedom & Choice Guarantee guidance about flexibilities introduced introduced flexibility April il Ma May y 2015 2015 2015 2015 Charge cap Changes to taxation FCA Second line of responsibilities start of death benefits defence General election Removal of short service refunds from trust based DC Life Time Allowance UK vote Changes to State reduction to £1m on Brexit pensions April il June June 2016 2016 2016 2016 Annual Allowance Lifetime ISA First Annual reducing from £40k to announced Chairman’s £10k per annum for Statement required higher earners IAPF Annual DC Conference 2016
Media in a typical day Gaming Reading TV Music Surfing downloads the internet On a Watching mobile online device videos IAPF Annual DC Conference 2016
IAPF Annual DC Conference 2016
The Three T’s T ailored T o the point T imely IAPF Annual DC Conference 2016
Lifelong learning IAPF Annual DC Conference 2016
Simple nudges IAPF Annual DC Conference 2016
Effective warnings Congra ratula ulatio ions ns, you n now e earn m rn more t e than £ n £100, 0,000! 000! This i is s a really go y good d time t e to save m ve more e int nto yo your ur p pens ension IAPF Annual DC Conference 2016
Send segmented communications instantly and monitor their impact IAPF Annual DC Conference 2016
Pre re- budget et 90% 90% + Members buying annuities at retirement IAPF Annual DC Conference 2016
6 Ap April il 2015 2015 + + + Cash Annuity Drawdown IAPF Annual DC Conference 2016
So how have our UK DC scheme’s changed their default investment strategy? IAPF Annual DC Conference 2016
Projected pot size Age Salary band Gender Contribution level Position in Company IAPF Annual DC Conference 2016
CASE S STUDY Y INVES ESTMENT B TMENT BANK IAPF Annual DC Conference 2016
BACK CKGRO GROUND Range of member groups High salaries mixed with low Undertook detailed segmentation IAPF Annual DC Conference 2016
IAPF Annual DC Conference 2016
IAPF Annual DC Conference 2016
TH THE S STRA TRATEGY GY Default targeting drawdown for most but cash for under £40k Additional alternative lifestyles Gives membership flexibility IAPF Annual DC Conference 2016
T echnolog hnology is s the new no normal al How y ow you enga gage ge Effic ficien ient decisi ision ons IAPF Annual DC Conference 2016
Lau Laura M a Myers DC Investment Partner, LCP laura.myers@lcp.uk.com www.lcphorizon.com IAPF Annual DC Conference 2016
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