Daily Archives: March 4, 2009

Pauline Skypala

Too much choice is often unhelpful. Those endless menus in some Chinese restaurants in particular turn pleasurable indecision into an annoying chore. It is the same with pension schemes: faced with 50 or more funds to choose from, members of defined contribution pension schemes are most likely to give up and go for the default fund.

A survey by Watson Wyatt finds schemes run by trustees much less likely to overdo fund choice than those provided on a contract basis, typically by life insurance companies. Two thirds of contract-based DC schemes provided by FTSE 100 companies offer 50 or more fund choices, while the same proportion of trust-based schemes offer 10 or less funds.

Previous research has shown that the vast majority of DC scheme members invest in the default fund. They do not have the confidence to make their own choice.

About the blog

FTfm is no longer updated but it remains open as an archive.

FTfm's specialist writing team offer their insights into the global fund management industry.

About the authors

Pauline Skypala has been editor of FTfm for four years having previously been deputy personal finance editor. She joined the FT in 1999 and has been writing on savings and investment issues throughout her career.

Steve Johnson, FTfm deputy editor, has been a journalist for 17 years, 10 of which have been with the FT.

Sophia Grene, reporter on FTfm, has been a financial journalist in print and online for 12 years.

Ruth Sullivan has worked as a financial/business journalist and foreign correspondent and for the past 10 years has been at the FT.