DC execs think U.K. government should raise mandatory contribution rates
U.K. executives that oversee defined contribution plans think the government should increase mandatory contribution rates and did not change their approach to running their plans as a result of the coronavirus pandemic.
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A joint survey by Mercer and the Confederation of British Industry, which represents U.K. businesses, also showed that although businesses support an expansion of automatic enrollment, a significant minority currently can’t afford higher minimum contribution levels.
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The survey was conducted between June 7 and June 25, among 350 pension fund managers and senior executives, who are responsible for U.K. retirement plans.
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Three-quarters of the survey respondents looked after a DC plan, while 31% of them managed a defined benefit fund alongside a DC plan.
Almost half, or 48% of respondents, managed a DC plan with less than £10 million ($13.5 million) in assets, and more than 41% of them managed a DB fund with more than £1 billion in assets.
Three-quarters of senior executives who responded to the survey believe higher contribution rates above the current mandatory 8% of the combined employer and employee rate will be needed in the future to ensure that workers end up with sufficient retirement income.
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