Pooling Pensions Could Give Better Outcomes For Savers
Financial experts are advocating more pension tinkering after an international study of workplace schemes concluded retirement savers could benefit from pooling resources.
The study looked at defined contribution pensions offered by employers and found that pooling could lead to benefit from economies of scale.
This was most significant when schemes looked at:
Negotiating fees for managing illiquid assets, where larger funds could gain cheaper rates
Developing in-house expertise when pooled pensions made the move more cost-effective
The report ‘The impact of DC asset pooling: International evidence’ by the Pensions Policy Institute also argues pension pooling could lead to stronger governance and reduced costs.
Researchers compared defined contribution pensions in the UK with similar pensions in Australia, South Africa, Mexico and Italy.
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