The benefit provided by a pension plan represents the most important financial asset for most of its members but many plan members have very little understanding of the value of their benefits and the risks that may be involved.
Yet the pension system in many countries is gradually transitioning from defined benefit arrangements (where the employer-sponsor bears most of the risks) to defined contribution (DC) arrangements (where the employee bears most of the risks). Increasingly plan members are making decisions relating to contribution levels, investment selection, and even the form of their retirement benefit.
Within this environment, it is essential that members have greater clarity and understanding of their pension arrangements so they can make better decisions and have confidence that the plans managing their retirement savings will deliver on their expectations.
Chapter 4 (page 19) covers:
- The need for information
- Comparative information
- An independent perspective
- The role of the regulator
- A summary of the global position
- The individual member’s perspective