Half of M&S DC members pass retirement date

Consequently members are sometimes retiring 10 years after their funds had made the automatic switch into bonds and cash, missing out on a large degree of investment return, DC committee secretary Fiona McDonagh told Baker Tilly’s Pensions Group Conference on Tuesday.

The scheme made its discovery following complaints from members that it was not adequately dealing with its retirement process.

“We have actually got about 50 retirees a month,” she said. “[The DC scheme] is not as immature as we thought.”

To tackle this, the scheme has set up a new system to write to each member five-and-a-half years before their selected retirement age, six months before their funds are automatically switched into more cautious assets.

The letter asks members, ‘Are your retirement plans changing?’; ‘Do you realise you are going to be switched in six months?’

Many DC savers were “unrealistic” about the level of retirement income they were to receive, she added.

McDonagh also told the conference only 600 members of the scheme had currently signed up to its website – a figure she admitted was “not very good in business terms”, but a substantial rise from 100 members a year ago.

Ian MacDonald, associate director at Barclays Pension Administration, told the conference its scheme website was updating tools such as its tax modeller to increase engagement.

It is looking at its “data quality” and seeking to connect more with deferred members to update personal data such as changes of address on the website, while keeping information relevant to them.He said: “That is one section of our members we haven’t been engaging with.”