The FTSE Group has launched three new defined contribution benchmarks which are specifically aimed at the UK market.

According to the group, the indices provide a robust benchmark for the broad evaluation of both lifestyle and target date DC default investment strategies.

The three index groups reflect different equity allocations and the methodology used can create custom benchmarks for any given DC default strategy glide path.

FTSE Group CEO Mark Makepeace said the new index series would give providers, fiduciaries and decision-makers with an independent and transparent means of measuring the value of investments.

"With automatic enrolment on track to create 9 million new UK DC savers, on government estimates, this launch is timely and necessary,” he said.

Henry Cobbe, the managing director at Elston Consulting, which helped FTSE to develop the benchmarks, said that by enabling a quantifiable evaluation of DC strategy performance, the series would help improve default investment strategies.

The President of the Society of Pension Professionals Duncan Buchanan said the series could play a crucial role in enabling better governance of DC schemes.

“With DC plans, as the member's benefits are directly linked to investment performance, it is important that performance can be tracked accurately and benchmarked. Automatic enrolment has been designed to encourage a savings culture and the ability for members to measure the performance of their pension savings in a transparent manner is key to promoting this culture,” he said.

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