Schemes vary considerably. A scheme’s DC benefits might relate solely to Additional Voluntary Contributions (AVCs). At the other end of the spectrum a scheme may be entirely DC, or it could have both DB and DC sections.

For DC arrangements, supporting good retirement outcomes can be viewed as providing the framework within which members can make appropriate contribution, investment and retirement choices:

  • DC arrangements may offer a single or multiple contribution options, and members usually also have the option to pay AVCs.  
  • The trustees will normally make available a selection of investment options from which members may choose.  
  • Member and employer contributions plus investment returns, less any charges, will form the funds from which members can take benefits. This may be from the retirement options offered within the scheme or by transfer, e.g. to access drawdown or annuity purchase.  

There is no need for the funding or employer covenant advice that DB arrangements require. However, due to the choices available, there is a greater need for communications to engage members to manage their retirement savings.