29 January 2019
Now let’s be honest, no-one jumps out of bed thinking about DC governance. But how do you get it higher up on your to-do list?
You have to start by asking yourself why you want good DC governance. It is not just completing checklists, ticking boxes, pacifying regulators or appeasing incessant consultants. It is also not just something that only trust based schemes have to think about. Companies using a Master Trust or a GPP cannot be hitting the snooze button but should also be striving for gold standard DC governance.
So what are the benefits of good DC governance?
There are many! Putting it plainly, it helps you lower corporate risk – for example, if your DC provider hasn’t made an individual’s investment choices promptly enough, that person could complain, but also blame the company and start asking or expecting you to compensate. Of course for trust based schemes – this risk is with the trustees. Are you monitoring your provider’s service levels?
On a more positive note, good DC governance can feel like breakfast in bed.
It can help improve people’s retirement outcomes – that means bigger pots, which (should) mean people retiring happier and maybe even sooner. That could be from better investment returns and / or lower charges. Have you benchmarked your members’ fees?
Good DC governance can also help build an attractive benefit package – this can be a great tool for recruitment and keeping employee talent as well as happier and more productive employees. Do you know how your contribution structure compares to others in your sector or industry?
It is worth doing, and worth doing right. At our upcoming DC and Financial Wellbeing Conference I’ll be shining a spotlight on DC governance. I’ll be giving practical tips on how, and why, you should be aiming for gold standard DC governance. So whether you are running a trust based scheme, using a contract based scheme or working with a Master Trust to deliver your DC savings – set your alarm for 19 March!