Pensions - Articles - Trustees risk losing track of over GBP50bn in DC assets

 The Working Party on the security of DC members’ assets has identified this potential for confusion and created a straightforward trustee guide to help them navigate this changing environment. 

 Rona Train, Partner at Hymans Robertson LLP and Chair of the industry-wide Working Party on the Security of DC Members’ Assets commented: “We are in a period of unprecedented change in the DC provider marketplace. Over £50bn of DC members’ assets will be invested either with a new provider or a different fund structure before the end of 2018. This is likely to mean a change to the level of protection provided on the assets in which DC members invest. Trustees are required under the DC Code not only to understand the levels of protection on the funds they offer but also to communicate this to members. It’s vital that they re-visit this on a regular basis.”

 Laura Myers, Partner at LCP, and member of the Working Party added: “Many trustees believe that looking at asset security once is enough. But this is not the case. Over the recent past, for example, we’ve seen the sale of BlackRock’s platform to AEGON, Zurich’s acquisition by Scottish Widows and the announcement of the Standard Life Aberdeen/Pheonix deal. This means that millions of DC members will see a change in their platform provider and hence potentially a change in the security of their funds. We’ve also seen a number of investment managers develop the structure of their funds from traditional “life-wrapped” funds to more modern tax transparent fund structures. This also changes the position with respect to asset security. It’s therefore vital that trustees regularly review the structure of their investments, and consider the impact of any changes and provide an update to members on this”.