Plan executives and trustees expect fund consolidation and climate change to be the most significant trends for the U.K. retirement industry over the next five years.
A report by the Pensions and Lifetime Savings Association, published Monday, said 48% of 129 executives surveyed believe that consolidation of retirement plans is the biggest upcoming trend in the U.K. retirement industry, as value for money assessments are underway and executives are seeking out greater economies of scale.
More than a third (36%) of respondents said climate change will be the most important factor shaping the industry over the next five years. Additionally, 64% of respondents agreed that retirement plans should be used to help tackle climate change and other environmental, social and governance issues, while 54% of respondents agreed retirement plans' assets should be used to improve the U.K. economy through infrastructure and other investments.
Half of those surveyed said they were currently investing in technology for the purpose of better running retirement plans or expect to do so over the next 12 months. For 42% of respondents, improving plan participant engagement was the top reason for investing in technology, while for 14% of interviewees reducing costs was the most important factor.
Half of respondents also said that online tools to gather data about retirement savings — known as dashboards — will be needed to improve plan participants' engagement with their retirement savings over the next five years.
"Whether it is engaging with a trend towards consolidation, seeking ways of harnessing new technology to help savers understand retirement income or taking steps to deal with climate change, it is vital that workplace pension schemes face the future to drive better outcomes for savers when they reach full or semi-retirement," Julian Mund, CEO of the PLSA, said in a news release.
"Against the backdrop of uncertainty brought by the coronavirus, the changes our industry faces underscore the importance of developing good public policy to ensure we have a system which is fit to meet the challenges of the next five years and beyond," Mr. Mund added.
The research was conducted Aug. 3-21. Surveyed executives were members of the PLSA and included CEOs, chief operating officers, CIOs, chairmen of trustee boards, consultants, directors, heads of pensions and pension managers.