Industry experts have argued that defined contribution (DC) is “broken”, suggesting that a conversation at board room level about this could create change.

Speaking in a panel session at the PLSA Annual Conference, WTW head of retirement Great Britain, Rash Bhabra, said that WTW would like to have a conversation at board room level around the fact that DC is "broken", arguing that the industry needs to rethink and reimagine pensions.

He said: “So far, most employers think they are doing okay with pensions. They don’t realise DC is broken so that’s why this stark language is really helpful.

“Only with a debate happening at employer boardrooms, with employers asking for this, will the government bring out the changes that are needed.

“I think there is already … quite a lot of mood music there that those changes will come through.”

Bhabra suggested that WTW would like to see the whole pension industry engage in this as it poses an opportunity.

Furthermore, he argued the industry's challenge with DC was it being “tomorrow’s problem”, urging the industry “to act now”.

“We need to reimagine pensions now,” he stated.

However, speaking on this topic later in the session, Nest Invest chief operating officer, Paul Todd, said: “I think DC done badly is broken.

“There are elements of DC, particularly since the reforms in 2014 removing the compulsory annuitisation.

“The lack of innovation stepping into that gap is causing real problems and real concerns.”

Todd suggested that the “key issues” for DC traditionally, had been a lack of focus from sponsors or the focus would be on defined benefit, a lack of innovation in approaches to investing, and not a lot of thought about how people would access their money.”

Despite acknowledging that “yes, DC is broken", he also argued that the industry should not give up on it yet.

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