The Pension Policy Institute have produced a paper on “Defined Contribution (DC) asset pooling – international evidence”, particularly Australia. The findings are very persuasive.

If this were to be coupled with DC pots follow member (when you change job your DC pension pot would move with you, as opposed to the current situation where you have multiple pots – one at each employer you have worked for) it could have an even greater impact on your total pension.

Its main findings are:

Larger funds have lower costs through economies of scale; Decreasing annual management charges by 0.1% pa, increases members’ pension by 2.5%.

Expertise and Governance is better in larger funds and larger funds have greater diversification and access to more asset classes.

If asset pooling could enable schemes to achieve an increase in investment returns of between 0.35% and 1.5%, members’ pension pots could increase by around 16% to 62%.

The biggest obstacle to this is regulatory barriers.