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Call for auto-enrolment league tables

Call for auto-enrolment league tables

A group of leading fund managers that is seeking to raise standards in defined contribution pensions has called for a league table of investment performance.

This comes in a report published by the DC Investment Forum, an organisation funded by managers such as Axa Investment Managers and J.P. Morgan Asset Management.

The report, entitled 'Investment Designs - a comprehensive study', states that league tables of investment performance for auto-enrolment master trusts are needed as a "matter of urgency".

Rob Barrett, chair of the DC Investment Forum, said: "At present, there is no single way to compare and contrast investment performance. Members deserve to be able to find out how their master trust is performing, and we expect demand for this reporting to inevitably grow as members' assets grow, and they start to take more interest in where they are invested."

The report goes on to suggest that such performance could measure how a typical 25, 35, 45 and 55 year-old invested in the default fund has fared.

It also makes the accusation that most master trusts at present are focused on cost and not value for members.

Harry Katz, an independent consultant at HA7 Consulting, had mixed views on the worth of performance tables.

"The whole premise for auto-enrolment is pile it high and sell it cheap.

"Members get invested in the least resistance of any-old-rubbish that happens to be about that the provider thinks they can shove someone into without getting into trouble," he said. 

"So it is not surprising there is not a league table because if people see the performance of these." 

However, he saw that as master trusts had not existed for long, publishing short term performance could initially be counter-productive. 

This point was echoed by Sean McSweeney, proposition delivery manager at Chase De Vere. 

"There is a challenge of people chasing performance which destroys value," he said. "One of the joys of having a master trust is that the trustees can take a longer term view."