Briefing Notes

Briefing Note 111 - DC scheme default strategy policy considerations

This is the second of two Briefing Notes looking at DC scheme default strategies. The first Note looked at how well the objectives of DC pension schemes’ default investment strategies meet the needs of their membership.  This Note outlines the current considerations and policy debates relevant to DC scheme default strategies and covers how:

• Default strategies are changing after Freedom and Choice.
• Investment in illiquids and alternative assets could benefit default strategies.
• Membership characteristics may affect the most appropriate default strategy.
• Retirement pathways could play an important complementary role to default strategies.
• Consideration of Environmental Social and Governance (ESG) factors could involve increased implementation and assessment costs, but may also result in more secure, long-term returns.
• Consolidation could reduce charges and increase the accessibility of illiquid assets for default strategies...