The riskiest day of your life

What is the riskiest day of your life? According to participants in the recent CAMRADATA annual defined contribution roundtable, it is the day you retire.

However, by the very nature of DC pensions, the whole investment journey is risky. Here are some key takeaways from the panel that may, or may not, help.

• Asked what the preferred contribution rate for DC pension savers was, the panellists suggested 15-20%.
• There is much focus on mindfulness and mental wellbeing these days. The panel felt this focus needed extending to financial wellbeing and the view was that this sort of education should start in schools. Apps that assist members in visualising what retirement looks like depending on how much they save, would help this process.
• One scheme said that 96% of its active membership was in the default plan.

We also heard that whilst DGFs tend to be the chief investment vehicle that are used by DC plans, pension schemes are also adding more asset classes. This is because they are looking to invest in growing parts of the global economy.

If they manage this, it could well be the key to reducing retirement-day risk.