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Barnett Waddingham’s Latest DC in Focus: A Must-Read on Default Strategy in 2024

Barnett Waddingham has just released their latest DC in Focus report, offering a powerful deep dive into default strategy performance across 25 DC workplace pension providers.

With government focus sharpening around value for money, this report couldn’t be timelier. What sets it apart is its thoughtful structure, breaking down the landscape through three insightful lenses—Member Outcomes, Risk Strategy, and Skill & Value-Add, while providing data that both challenges and informs.

Key Findings:

1. Member Outcomes – The performance gap between providers in 2024 was stark: a 14.4% spread in the growth phase and 7.7% in retirement. Yet all beat inflation-plus benchmarks (CPI+4% and CPI+2%, respectively). Over five years, however, only 60% hit an inflation plus target in the growth phase and just one met this in the retirement phase, underlining how vital long-term perspective is, particularly in periods of heightened inflation.

default strategy for the latest DC

2. Risk Strategy – The report highlights meaningful variation in risk appetite and philosophy between providers, reflected in strategy, diversification, and assumptions around how members will access benefits. Equity-heavy strategies, especially those with U.S. exposure, outperformed in 2024, while diversified approaches lagged. This demonstrates just how influential asset mix and risk appetite are on member outcomes, and we expect heightened focus on risk-adjusted returns. The volatility in equity markets since the announcement of a new US tariff regime earlier this month will have been a real-life stress test for many arrangements.

3. Skill & Value-Add – Comparing actual returns to a low-cost passive equivalent, the findings suggest many providers struggled to demonstrate true value from sophistication. This lens is useful for identifying whether added complexity genuinely benefits members or simply tracks market noise, but it is also important to note that different market conditions can affect this – 2024 was a year when simplicity was beneficial.

Our Views On The Report

At Pi Partnership we endorse the report’s view that investments in private markets, if implemented with care and robust governance, can play a pivotal role in delivering better outcomes. With 15 of 17 unique providers now planning to integrate private markets into default arrangements, it’s clear the industry is moving beyond discussion into meaningful action.

But innovation alone isn’t enough. Providers must be able to evidence their decision-making, considering both risk-adjusted returns and costs, ensure proper oversight, and demonstrate a clear roadmap for scaling. The inclusion of a meaningful allocation to private markets implemented well with proper oversight can be hugely beneficial, but heading into this complex area just to keep up with competitors without adequate planning for all possible scenarios is fraught with danger.

As the report rightly says: the pace of change is only accelerating. At Pi Partnership, whether we are trustee or governance support, we believe now is the time to engage with your provider, challenge assumptions, and get some time on the agenda to ensure your default strategy is not just fit for today, but for the long-term financial wellbeing of your members.

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Amanda Burden

Director and Governance Specialist

Amanda is a Board Director of Pi Partnership Group and leads the development of Pi’s services. She works closely with clients, the Pi team and professional advisers to ensure all of Pi’s services meet the changing needs of the pension market and deliver clear value to Pi’s clients.

Amanda has over twenty-five years’ experience in the pensions industry and, as well as ensuring Pi’s services continue to meet the needs of our clients in a rapidly changing pension landscape, is also a member of Pi’s Executive Management Team. She provides specialist project management for clients on a range of services, including adviser selection and review, trustee board assessment and governance design.

As well as being a Fellow of the Pensions Management Institute (PMI) and Chair of the PMI London Group, Amanda holds PMI certificates in Pensions Automatic Enrolment and DC Governance, was a past Prince2 practitioner and is a Certified Risk Management Practitioner.

What do you most enjoy about your role:  Successfully delivering complex projects and creating a happy team environment.

Interests outside work: Travel, theatre and as part of Abundance London helping create beautiful spaces in urban settings.

Top achievement to date: Competing in the 2005/06 Round the World Clipper race.