Welcome to www.capa-data.com the new interactive website designed to help pensions professionals and others better understand the performance, risk and broader strategy of DC pensions.
The site allows you to view and compare the performance data of over 30 DC pension defaults, covering all the main players in the multi-employer auto-enrolment sector, reflecting collectively the pensions of over 12 million Britons.
Free to users, the site shows performance data over 1, 3 and 5 years for both younger and older savers, as well as the level of risk taken to achieve that return.
It is a comment widely made in the pensions industry that it is contributions, not performance, that matters. It is certainly the case that it is possible to influence the amount you contribute, whereas performance is to an extent in the lap of the gods. But the decisions made by asset managers and those within schemes selecting asset allocation strategies will have a big impact on savers’ pots.
In fact, for some savers, performance has given more on contributions made five years ago than employer contributions or tax relief. Despite the market fall at the end of the year, the Q4, 2018 Corporate Adviser Pension Average (CAPA) – the average performance of the 30 biggest defaults, was 7.8 per cent annualised over five years. That is a return of more than 45 per cent on auto-enrolment contributions made five years ago – something for the industry to celebrate.
But the range of outcomes is also wide, as is the risk approach as the data on the different schemes shows.
Comparing and chasing performance is a notoriously difficult business. Hindsight is a wonderful thing, and many a skilled asset manager or pension trustee will have spent miserable months and even years watching their assets lag, looking on in complete but tested confidence that the process and strategy they followed was the right one – it was just that the market went against them.
Auto-enrolment defaults have enjoyed years of upward movement, having the fortune to have been launched mid-way through a decade-long bull run. The first three sets of data we collected for the Corporate Adviser Pensions Average (CAPA) data set, running up to Q3, 2018, all showed very positive performance statistics for nearly all market players. But the figures to the end of 2018, published today, show a markedly different picture – the end of year market dip having put 12-month returns into negative territory – if only the man and woman in the street didn’t look first at the last year’s returns…
This new website, a sister site to our regular www.corporate-adviser.com news site, will enable you to interact with the data, selecting master trust and contract- based default to compare how they have performed across different time periods. It also holds a wealth of information on asset allocation, providers and adviser opinions, drawn from our Corporate Adviser Intelligence reports.
We hope this innovation, which is free and open to all, will raise the standard of debate across the industry, shining a light on best practice, giving a clear picture on the pros and cons of different approaches, and supporting all those overseeing DC pensions in doing the very best for their members. We welcome your feedback.