How UK DC schemes are using technology for better communication - - PowerPoint PPT Presentation

IAPF Annual DC Conference 2016

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 mem ember er

• ut
• utcomes

Member engag ageme ment Eve Ever chang nging ng le legisla slation

IAPF Annual DC Conference 2016

£0.0 £5.0 £10.0 £15.0 £20.0 £25.0 £30.0 £35.0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Vlaue of new annual contributions Number of active members ('000)

Dat Date

Estim imated ed t total a l activ ive D e DC member ership ip a and annual c l contrib ibutio ions Number of active DC members ('000) New contributions (£ billion)

Source: ONS and HMRC

IAPF Annual DC Conference 2016

April il 2015 2015

Freedom & Choice introduced Reduced Annual Allowance for those with flexibilities Charge cap responsibilities start Guidance Guarantee introduced Changes to taxation

• f death benefits

General election Lifetime ISA announced Removal of short service refunds from trust based DC

April il 2016 2016

Changes to State pensions Life Time Allowance reduction to £1m First Annual Chairman’s Statement required Annual Allowance reducing from £40k to £10k per annum for higher earners

Ma May y 2015 2015

More TPR guidance about flexibility FCA Second line of defence UK vote

• n Brexit

It’s been busy…

June June 2016 2016

IAPF Annual DC Conference 2016

Watching

• nline

videos Surfing the internet Reading Gaming TV Music downloads On a mobile device

Media in a typical day

IAPF Annual DC Conference 2016

IAPF Annual DC Conference 2016

Tailored To the point Timely

The Three T’s

IAPF Annual DC Conference 2016

Lifelong learning

IAPF Annual DC Conference 2016

Simple nudges

IAPF Annual DC Conference 2016

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

Effective warnings

IAPF Annual DC Conference 2016

Send segmented communications instantly and monitor their impact

IAPF Annual DC Conference 2016

Members buying annuities at retirement

90% 90%

Pre re- budget et

+

IAPF Annual DC Conference 2016

6 Ap April il 2015 2015

+ + +

Cash Drawdown Annuity

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 Salary band Contribution level Age Gender Position in Company

IAPF Annual DC Conference 2016

INVES ESTMENT B TMENT BANK

CASE S STUDY Y

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

Effic ficien ient decisi ision

• ns

T echnolog hnology is s the new no normal al How y

• w you

enga gage ge

IAPF Annual DC Conference 2016

Lau Laura M a Myers DC Investment Partner, LCP laura.myers@lcp.uk.com www.lcphorizon.com