Education key to closing gap between DC scheme design and member outcomes, experts say

Panellists said cashing out is not always wrong, especially for those with other pensions, but said many members do not understand their options. 

Key risks included not knowing about tax, underestimating how long savings need to last, inflation risk and running out of money too soon.

The report also found that while digital access continues to improve, member engagement remains a challenge. 

Most large schemes now report online registration rates above 60%, yet expression-of-wish completion rates remain below 40% for the majority of schemes.

Speakers described these levels as “ridiculously low” and “scary”.

Data showed that only around 10% of assets in master trusts are in self-select funds, rising to 20% to 25% in larger schemes, but most members are not actively involved.

Blood said collective defined contribution (CDC) could be part of guided retirement frameworks, but more work is needed.

The panel looked at engagement strategies such as campaigns by age or tenure. 

They reported that some schemes saw 10% to 15% of members take meaningful actions after targeted communications, but most members stay passive. 

Panellists warned that strong markets may have hidden some risks from cashing out early, but a downturn could make outcomes worse. 

Providers and asset managers said there is pressure to develop default retirement options and guided pathways by 2030. 

Speakers said progress depends on members understanding their options and being confident to make choices.

Gravell said: “Private markets are being used more, either in main defaults or as alternatives. 

“Charges, which have been falling, may go up as private markets expand. 

“Risk controls are more important as more members and assets are concentrated on fewer platforms.”

Flanagan said: “The key themes for the sector are value, comparative assessment and decumulation. 

“Value for Money is important, but so is the wider member experience. Consolidation and investment design, including private markets, are central. 

“Decumulation is the area where most change is needed, with a focus on education and engagement.”

For trustees, scheme design and operational structure were highlighted, including using surplus or moving to bundled arrangements. 

For employers, the link between pensions and wider reward and wellbeing was stressed. 

Employers were warned that undervaluing pensions could be a “ticking time bomb” for ageing workforces. 

For providers, the focus was on improving member experience, not just size. 

For members, Howden said they should check contributions and see pensions as an asset.

The meeting ended with a reminder that the real test is whether scale and growth lead to better outcomes, not just bigger schemes.