Eighty-eight per cent of defined contribution members remain in their default fund, according to the Pensions and Lifetime Savings Association.

Research from its 43rd Annual Survey 2017, which had responses from 176 members which had a variety of DC, defined benefit, master trust and Local Government Pension Schemes, represents over 6.5 million members and £526bn of assets.

Despite the high majority of members remaining in a default fund, the survey found that the number of fund available remains high, with the average being 14. However, the number does vary between trust and contract based schemes, with trust based schemes offering on average 12 different funds compared to 55 in contract based schemes.

Just over a third (34 per cent) of DC respondents described their investment strategy for the growth phase of their main scheme’s default fund as passive tracker. This was followed by multi-asset fund (26 per cent), diversified growth fund (25 per cent) and bespoke solution (21 per cent).

Furthermore, the default contribution rate for newly auto-enrolled members remained stable in comparison to 2016. The default mean total contribution rate was 8.4 per cent. The default mean employee contribution rate was 2.4 per cent and the default mean employer contribution rate was 5.9 per cent. The majority of employers (71 per cent) are already contributing 3 per cent or above, which means they are already providing the minimum contribution rate scheduled for 2019.

Considering DB schemes, the PLSA found that the overall contribution rate rose slightly to 33.6 per cent. This is mainly due to a slightly higher employer contribution rate 28.0 per cent (2017) compared to 24.2 per cent in 2016. The mean employee contribution rate continued to be around 6.0 per cent at 5.6 per cent.

In addition, mean running costs reported by DB schemes increased from £546 per member (2016) to £612 per member (2017) with costs driven by increase to levies, governance and trustee training as well as administration, record keeping and communications.

The share of DB assets invested in equities continued to fall from 33 per cent (2015) to 28 per cent (2016) to 23 per cent (2017). The share of assets in fixed income and other assets increased to 47 per cent (45 per cent - 2016) and 30 per cent (28 per cent - 2016) respectively.

Commenting, PLSA director of external affairs Graham Vidler said: “As we await the publication of the government's automatic enrolment review, we have released our 43rd annual survey which highlights our members approach to workplace pension schemes. It charts the growth of DC schemes as the dominant workplace pension option following the advent of automatic enrolment and highlights the stark difference between the amount of money flowing into DB schemes compared to DC schemes.

“As part of our commitment to helping everyone achieve a better income in retirement, we launched a major new consultation – Hitting the Target – in October which proposes a set of national retirement income targets. This consultation closes on the 12 January and we welcome input from interested parties as we work to build a retirement savings market which is truly focused on the end users.”

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