Outlook for DC Pension Schemes
Outlook for DC Pension Schemes
08 Mar 2023
2022 brought an abrupt end to steady growth in Defined Contribution (DC) pension scheme pots as war, high inflation, weakening economic growth and higher interest rates put pressures on growth assets. With DC schemes having seen large impacts on performance in the past year, now is a good time to reassess the investment strategies covering those who are approaching or close to retirement, to see if the last two years have highlighted any areas for change in the face of a volatile market.
We review what happened and highlight actions employers and trustees can take to improve outcomes for DC pension scheme members in our briefing. Additional topics covered include approaches to illiquid assets and sustainability. Download our briefing below, or read on for a brief summary.
Outlook for DC Pension Schemes in Brief
Most DC schemes will have seen negative returns from on their investments over 2022, with strategies closer to retirement likely to be the worse affected, although those targeting annuity purchase will have seen the cost of buying an annuity falling too.
Now is a good time to reassess the investment strategies covering those who are approaching or close to retirement, to see if 2022 has highlighted any areas for change.
Trustees will need to start considering their approach to investing in illiquid assets as upcoming regulations mean that their Statement of Investment Principles will need to disclose and explain allocations.
Sustainability and consideration of ESG risks and opportunities should continue to be high on trustees’ agendas through 2023.
For a more in-depth look at how DC schemes have been affected and what the outlook for growth and development is like, download our full PDF briefing which provides further insight and information.
To discuss any of these issues, contact Mark Searle or your usual XPS Investment contact.