Please note: this programme is subject to change
Effective, timely and informed decisions about pensions are a huge challenge - an FCA report last year suggested that 33% of non-retired adults have never thought about their pension before. Taking a behavioural approach to this challenge can help. Thinks Applied Behavioural Science Team’s experiment conducted for the Association of British Insurers showed how a combination of personalisation and simple design and copy changes can dramatically improve financial decision making.
Thinks delivered an iterative mixed-methods intervention design and test (with COM-B) to produce evidence for the impact of personalised guidance on the quality of decision making around pensions for the Association of British Insurers (ABI). We created user journey maps to select appropriate pensions decisions, conducted qualitative research with people making those decisions and industry experts, co-designed personalised guidance options drawing on both the behavioural science literature and experts from the pensions industry and ran an online RCT to produce rigorous evidence of impact.
Max Mawby will address:
- This recent work (that fed into the Advice/Guidance Boundary Review and ‘targeted support’ system proposal from the FCA and HMT)
- How taking a behavioural approach can improve outcomes for your customers
From geopolitics to technology, climate and energy, debt, demographics and the return of big government, global markets face simultaneous upheaval across multiple dimensions. After an atypical generation of falling inflation, rates and volatility, these tectonic shifts are likely to drive markets into a more volatile and inflation-prone era which will fundamentally challenge many of the assumptions which underpin popular portfolio strategies. This presentation will focus on how to navigate this more turbulent landscape, focusing on the importance of shifting cross-asset correlations and identifying a host of generational risks and opportunities now in play.
Historically, most UK DC schemes favoured passive index strategies, with default strategies heavily inclined towards public markets. However, since the Global Financial Crisis, markets have experienced stable growth and low inflation, but the shift observed in 2022 indicates a new era of macroeconomic volatility, prompting DC schemes to adjust their default strategies accordingly. With changing macroeconomic conditions and a rising focus on sustainability, an increasing number of DC schemes are turning to private markets for better diversification and potentially higher risk-adjusted returns. It is imperative for trustees to diversify investment strategies to safeguard members' retirement incomes.
Despite the recent retracement in yield levels, money market and short-dated bond yields currently hover near their highest since the end of the 2008/2009 global financial crisis. Institutional investors may be tempted to increase allocation to these strategies, not only due to their current appeal but also because they can yield as much or even more than longer-dated equivalents. The notion that lower duration may equate to lower risk is evident in recent history. However, this doesn't necessarily diminish the appeal of longer-duration bond strategies for investors.
This session will address:
- The roles of shorter and longer bonds in investor portfolios
- Whether longer duration bond strategies can be equally attractive compared to their short-dated counterparts
- How shorter and longer bonds can contribute to achieving specific outcomes
In the last decade, pension schemes of various structures have significantly increased allocations to illiquid assets. In contrast, UK DC schemes have been more cautious in entering the illiquid space. However, with the chancellor's Mansion House Compact, the stage is set for a substantial increase in illiquid assets. As this landscape evolves, what considerations should schemes bear in mind?
This session will address:
- Potential pitfalls and overlooked investment risks
- Lessons learnt from the September 2022 Mini Budget
- Strategies for DC schemes to adjust portfolios, optimising risk-adjusted returns and enhancing resilience
LTAFs present British pension savers with a distinctive chance to invest in a vital asset class, delivering stable, diversified, and inflation-linked returns. Providing access to long-term investments in private markets, encompassing wind, solar, hydrogen, heating, and storage assets, LTAFs emerge as an enticing and diversifying addition to DC members' portfolios, offering exposure to renewable energy and the broader energy transition.
This session will delve into:
- Are LTAFs the future, and why?
- Addressing challenges associated with LTAFs and strategies for resolution
- Assessing the potential impact of LTAFs on boosting private market DC investment over time
DC Pensions have undergone significant transformations over the past decade, driven by regulatory shifts and changing consumer preferences. Master trusts, integral to this landscape, gained prominence post-auto-enrolment and have sustained their appeal. As the horizon presents further changes for DC schemes, the master trust environment and solutions are poised for continued evolution in the coming decade.
This session will explore:
- The reasons behind consolidating
- What happens under consolidation?
- Pros and cons associated with consolidation
- Insights into the future trajectory of Master Trusts
In the 2023 Autumn Statement, the chancellor introduced the concept of a lifetime pension, commonly known as a 'pot for life' or 'provider for life.' This initiative allows employees to choose a single pension for joint contributions, aiming to enhance saver outcomes and reduce the prevalence of multiple pension pots. Despite promising prospects, there is still a considerable journey ahead.
This session will explore:
- Pros and cons associated with the pot for life
- The potential timeline for implementing the pot for life
- Anticipated milestones in the implementation process
- Examples of other countries adopting similar approaches
- Strategies for schemes to support members during the cost-of-living crisis and recession
- Predictions and measures to expedite the resumption of member contributions
- Guidance for schemes advising members balancing short-term needs with retirement goals
- Anticipated impacts on DC schemes, and preparations for upcoming challenges
The proposed architectural changes to decumulation is gathering considerable traction. Trustees will be legally obliged to provide decumulation services to members, either within the scheme or in collaboration with an external provider. Government survey results indicate that only 28% of individuals aged 55 to 59 have a clear retirement plan, with 17% unaware of their available choices. The surge in the 'baby-boomers' population means that nearly a million DC members enter pre-retirement each year, necessitating greater sophistication in managing the growing number of members and assets.
This session will address:
- How can schemes offer a more streamlined retirement process when members wish to access their pension?
- What does a decumulation strategy look like?
- Investment portfolio construction in decumulation
Workplace pensions are increasingly a focus for policymakers keen to fix the UK economy. Although said policymakers are ambitious, what’s been proposed so far is unlikely to benefit current or future retirees. SEI will explain why, and argue that societal needs be placed at the heart of retirement saving.
Join us for the grand finale of the Professional Pensions Defined Contribution Conference as we unveil our closing keynote session featuring Louise Davey from The Pensions Regulator. TPR has recently revealed its highly anticipated general code of practice, enabling governing bodies to align their schemes with TPR's governance standards, benefiting both regulators and savers. As the pensions industry prepares for substantial challenges in 2024 due to impending changes in government legislation, regulations, and policies, this session provides a direct update from TPR.
This session will address:
- TPR's latest updates
- Industry expectations for the future
- Addressing concerns and questions regarding upcoming regulations