The use of diversified growth funds among U.K. corporate defined contribution plans exploded in the past year, according to investment consultant Towers Watson.
In an annual survey of FTSE 100 companies, Towers Watson found that 70 of the 100 largest U.K. public companies offer a diversified growth fund as an investment option, up from 43 plans last year.
The survey also showed that 92 plans now offer a default investment option, up from just 10 a year earlier. The vast majority of default options offered are lifestyle strategies that include diversified growth funds, according to Towers Watson.
“Getting the default investment option right has become critical for pension funds as more people are investing in them than ever before,” Chris Smith, senior investment consultant at Towers Watson, said in a news release. “To achieve this, many (plan executives) have segmented their memberships by individual risk profile, through a risk-assessment exercise, in order to tailor the default option, using DGFs where suitable.”
