Defined contribution pensions: dealing with the reluctant investor
Journal of Financial Regulation and Compliance
ISSN: 1358-1988
Article publication date: 25 July 2008
Abstract
Purpose
The purpose of this paper is to provide an overview of key issues in the governance of defined contribution pension schemes, with a focus on investment matters, and to recommend best practices.
Design/methodology/approach
The paper draws on the results of an online survey of the opinions of pensions professionals and on interviews with pensions professionals.
Findings
The paper finds that many employers and pension scheme trustees are reluctant to take an active role in pension scheme design and to provide support and guidance to members for fear of legal liability. Scope exists for regulators and legislators to create “safe harbour” provisions that will encourage employers and trustees to become more active in supporting members.
Practical implications
The paper makes a number of suggestions for best practice in the design and governance of defined contribution pension schemes, for example, in terms of the fund choice that should be offered.
Originality/value
The paper provides the first comprehensive review of investment issues for UK defined contribution pension plans.
Keywords
Citation
Byrne, A., Harrison, D. and Blake, D. (2008), "Defined contribution pensions: dealing with the reluctant investor", Journal of Financial Regulation and Compliance, Vol. 16 No. 3, pp. 206-219. https://doi.org/10.1108/13581980810888822
Publisher
:Emerald Group Publishing Limited
Copyright © 2008, Emerald Group Publishing Limited