Lack of understanding 'may affect pension schemes' ability to manage assets'

A lack of understanding in investment and risk concepts may be restricting the ability of many pension schemes to manage their assets in the most appropriate manner, according to a new study by the Irish Association of Pension Funds (IAPF).

"Members of defined contribution (DC) schemes have the power to set their own investment strategy in line with their particular circumstances. However, our study finds that many DC members do not feel confident to make such decisions or are not interested enough to do so," commented Joe Byrne, Chairman, IAPF.

Helen Keelan of the IAPF Investment Committee which commissioned the report added: "The general lack of understanding of investment issues includes some trustees of defined benefit (DB) schemes who appear reluctant to get involved with more complex, modern investment strategies, such as investing in alternative assets.

"Such alternatives could benefit their schemes by helping to maintain overall returns of their pension fund whilst at the same time improving their level of risk diversification."