A DB Master Trust pension that cuts out complexity and delivers efficiency

A master trust pension is an occupational pension scheme used by multiple non-associated employers.

The trust is a single entity, but each employer has their own ringfenced fund, with no cross-subsidy between employers.

DB master trust pension schemes allow employers to continue paying contributions and exercise oversight over their section of the scheme.

A DB Master Trust pension can cut out complexity and deliver efficiency through economies of scale. This can lead to better outcomes for employers and members - with less hassle for everyone concerned.

You should expect the right solution to:

• provide quality and consistency of governance and provide your sponsor with a more effective route to your endgame.
• improve value through economies of scale and lead to an overall long-term reduction in fees.
• give you more time to concentrate on strategy and reduce the longer-term risk while the DB Master Trust pension manages the day-to-day operations of the scheme.

An employer can transfer their DB scheme assets and liabilities to the Mercer DB Master Trust pension. Mercer will take on responsibility for all aspects of running the pension scheme and provision of services. The employer’s existing scheme can be wound up, and the existing trustee roles will no longer be required as trusteeship will be provided by the DB master trust’s professional trustees.

The Mercer DB Master Trust pension combines our pension expertise with the $300bn buying power of our global fiduciary management business. It can enable employers to reach their pension endgame more easily by:

• taking on fiduciary management of their pension assets to monitor investment markets and funding levels in real time to lock in any favourable short-term pricing.
• assuring quality governance provided from three professional trustees from separate independent trustee firms who govern the master trust pension under advice from Mercer’s range of pension experts.
• allowing the employers to agree an endgame and letting the master trust pension get on with achieving it. The end game can be run-off – where the scheme becomes fully funded and no more sponsor contributions are required – or buyout – where benefits are secured with an insurer.

The Mercer DB Master Trust pension is a long-standing master trust, which evolved from the Federated Pension Plan (FPP).

This trust has over 70 participating employers.

The FPP originally focused on public sector outsourcing arrangements and is one of only a limited number of master trusts to have a passport from the Government Actuary’s Department.

This means that the master trust pension can also provide broadly comparable pension benefits to the public sector.

Building on the strong base of the FPP and adding the scale offered by Mercer provides an excellent solution for private sector clients looking to manage legacy DB liabilities.

Moving your legacy and existing DB occupational pension scheme over to a master trust pension creates risks and opportunities.

We have an effective transition plan and an experienced team to help mitigate any risks and use the move as an ideal opportunity to position the scheme for the future and at the same time enhance the member experience.