NAPF Conference 2011: Trustees left frustrated by Hutton
Trustees have expressed concern about the future of defined contribution (DC), despite Lord Hutton's claim it could be as good as defined benefit (DB) for retirement incomes.
Speaking at the National Association of Pension Funds conference, Hutton also told delegates while DB could have a long term future at least in the public sector, it did the industry little good to continue "demonising DC".
However, his argument to support DC fell flat with Dave Gott, trustee director at the Railways Pension Trustee Company, who believes the issue of city investment banks and funds charging "enormous" fees has to be tackled first.
Gott told PW: "What gets me is the individual who is in a DC scheme with a private company is at the mercy of that company and has to accept whatever comes out at the other end."
He put his question to Hutton during the session, but was left unsatisfied with Hutton's response. "It was a politician's answer wasn't it," he added. "I would have liked Hutton to have said he will look into the City practices and the problems with annuity prices."
Gott did accept Hutton was somewhat hog-tied in the process of public sector reform, in that his remit did not allow for him to investigate the wider issues of investment fees and contribution rates.
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