The retirement industry is going through the ultimate stress test when it comes to investments, participant communication and robustness of administration systems as the coronavirus wrecks havoc on markets, warn executives.
The spread of COVID-19 in the U.K. and associated falls in stock markets are piling pressure onto retirement plans, with participants requesting knee-jerk changes to strategies, said speakers at the annual Pensions and Lifetime Savings Association investment conference, held in Edinburgh.
"Plan participants are calling to switch out of growth assets (and) into cash," said Emma Douglas, chairwoman of the PLSA policy board and head of defined contribution at Legal and General Investment Management, on a panel discussion.
But panelists warned that current market volatility means now is not the right environment to make asset transfers.
Participants are also contacting investment consultant Lane Clark and Peacock with questions and asking to make investment changes, said Laura Myers, head of defined contribution.
Trustees should hold fire before making transfer decisions, said Brian Henderson, partner and director of consulting at Mercer.
They should instead focus on their own plan's sustainability and engage with sponsors to check they are still able to cover liabilities, known as covenant checks, Mr. Henderson said.
Due to the uncontrollable nature of the virus, having access to a supplementary savings account or emergency account alongside retirement savings "could be very necessary right now," added Chris Hitchen, chairman of the £45 billion ($58.7 billion) Border to Coast Pensions Partnership, Leeds, England.