Defined Benefits (DB) Master Trust - An overview

Managing DB pension schemes is becoming increasingly complex and many organisations suffer from time or cost constraints in managing these. These challenges are particularly acute in the case of smaller or mid-sized legacy DB arrangements where dedicated internal resource is often not available.

 

The Mercer DB Master Trust offers employers a simple solution that brings together the best of Mercer with the aim of creating greater value and improved outcomes, both for sponsors and for members. It also uses the buying power of our fiduciary management platform, with around £230bn of global assets under management, to access significant reductions in investment manager fees, with these savings helping to increase the overall value of our proposition to sponsors.


What is a DB Master Trust?

A Master Trust is an occupational pension scheme for multiple non-associated employers, with each employer included in their OWN section. The company continues to pay the contributions, and has high level oversight, for their scheme.

 

 

Under the Mercer DB Master Trust, Mercer will take on the legal responsibility for all aspects of running the pension scheme and provide all services, including investment with fiduciary management, journey planning, actuarial services, covenant assessment, scheme management and administration. Existing trustee roles will no longer be required as trusteeship will be provided by the independent professional trustees of the Mercer DB Master Trust.


Why a DB Master Trust?

A DB Master Trust solution can cut out complexity and deliver efficienciesin particular when dealing with any changes in regulatory requirements. This can lead to better outcomes for your sponsor 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 via economies of scale and lead to an overall long-term reduction in fees
  • give you more time to concentrate on strategy and reducing the longer term risk while the DB Master Trust manages the day to day operations of the scheme

The Mercer DB Master Trust, making pensions easy

  • The Mercer DB Master Trust, making pensions easy

    “DBMT - efficient governance and wider investments to improve member outcomes”

    What is involved in running a pension scheme?

    Running a DB pension scheme can be a challenge. Sponsors and trustees are faced with ever increasing demands on their time. They must make decisions about investment and funding strategies, comply with standards on risk reporting, meet their ESG responsibilities, and keep on top of the rising governance burden, while providing members with their benefits on time. Many organisations are struggling to find volunteers to take on these responsibilities as trustees.

    How can Mercer help?

    Mercer offers a simple solution. By consolidating your scheme into the Mercer DB Master Trust, we will take on the responsibility for all aspects of running the pension scheme and provide all services – all covered by a single assets under management fee. Your existing trustee will no longer be required as Mercer appoints independent professional trustees to govern the master trust.

    What are the benefits of the Mercer DB Master Trust?

    The Mercer DB Master Trust brings together our range of pension expertise with the buying power of our fiduciary management platform. This means you will benefit from:

    1. Greater economies of scale - our pooled buying power has the potential to reduce your investment fees
    2. Greater efficiency  – sponsors need only agree the endgame and let the master trust team get on with achieving it
    3. Greater certainty - the combination of our high quality governance and investment management teams means you can be more certain of achieving your goals, providing a better outcome for your members, and you.

     

    Contact us now to find out more about the Mercer DB Master Trust and how it might benefit your scheme.

Why the Mercer DB Master Trust?

The Mercer DB Master Trust  combines the experience of a long standing Master Trust with the fresh thinking of our experts, and the significant buying power we can bring, to deliver a solution that is truly market leading.

 

 

  1. Better value: Mercer’s fiduciary management team provides services to the Trustee of the Mercer DBMT. By being a part of the Mercer DBMT you can:

    • Leverage economies of scale and Mercer’s buying power with individual Investment Managers, thus adding value to the fund by potentially reducing overall fees - the Mercer DBMT has access to the c£250bn of funds (as at 31 December 2021) operated by Mercer globally. We therefore expect you could achieve potential cost efficiencies compared to the investment fees you currently pay. We use our collective scale buying power exclusively to benefit our clients.

    • Benefit from a dynamic, timely and efficient approach when responding to changing market conditions.

    • Ensure that your assets are invested in a way that reflects, on an ongoing basis, Mercer’s best investment ideas, developed by a global team of investment experts with an enviable depth and breadth of research coverage backed up with decades of experience.

  2. Straightforward transition: A move to a DB Master Trust creates a risk and an opportunity. It is important to have an effective transition plan and an experienced team that can mitigate risks but at the same time use the move to enhance the member experience. We will deliver a well-planned, well-managed and well-executed project.

  3. Smoother path to end game: The long-term objective for many schemes is full buyout making Mercer the perfect partner for the journey. Using our significant experience and expertise, we will work with you to design a definitive investment journey plan that maximises expected returns in a risk controlled manner including a risk transfer strategy that addresses the scheme liabilities in an efficient and effective manner and considers the options available to members in order to accelerate your journey to wind up.

  4. Curated expertise: You need access to advice and expertise. While many firms have the depth and breadth of skills required, you need a solution that guides you to these pockets of excellence when needed. You need somebody to curate the pool of talent at your disposal to ensure stakeholder outcomes. We have a strong track record of experience across all areas of running pension schemes combined with new thinking, generated for bigger clients that can be brought to all our clients via the Mercer DBMT.

  5. Focus on members: Pension schemes exist to support the future financial well-being of their members. By having a member-first approach, both trustees and sponsor can ensure that the scheme meets its obligations without overburdening the sponsor with day-to-day management of the scheme. We will continue to invest in solutions that enhance the member experience:

    • Pension Decision Service – a unique and dedicated service providing support to members as they approach their retirement decisions

    • Member online portal (optional) - allowing access to scheme information and member functionality

  6. Market Leading: Master Trust solutions concentrate on driving out complexity and cost and therefore ending up with an integrated delivery model. The Mercer DBMT solution encourages continual improvement for the life of the scheme. Mercer has market leading propositions for every component of the Mercer DBMT: A partner for the complete journey.

History

The Mercer DB Master Trust has evolved from the Federated Pension Plan (FPP), an existing and long established Master Trust that currently has c. £260m of assets and 73 participating employers. Traditionally, the FPP focused on public sector outsourcing arrangements and is one of only a limited number of Master Trusts with a passport from the Government Actuary’s Department confirming that it can provide broadly comparable pension benefits to the public sector.

 

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

 

As part of strengthening the offering, we are delighted to announce the appointment of Independent Trustee Services and PTL as additional professional trustees to work alongside PAN Trustees who has been the Trustee of the FPP for over 15 years.

Making the move

A move to Master Trust creates risks and opportunities. We have an effective transition plan and an experienced team that will 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.


Meet the Mercer master trust trustees

  • Rachel Croft

    Rachel Croft | Chair of the Trustees - ITS Limited

      

     

    With over 20 years’ experience in pensions, Rachel is a Director of ITS, representing the firm as Lead Director on professional trustee appointments in relation to pension schemes with assets between £25m and £2.5bn. Most of her time is spent on leading trustee appointments. She is also a statutory director of the firm.

     

    Rachel is a qualified Solicitor and Fellow of the Pensions Management Institute.  She holds the PMI Level 3 Certificate in Pension Trusteeship and is an Accredited Member of the Association of Professional Pension Trustees.

     

    Prior to joining ITS, Rachel was UK Governance Leader for Mercer’s Retirement Business.

  • Lynne Stewart-Brindle

    Lynne Stewart-Brindle | PAN Trustees UK LLP

      

     

    Lynne’s extensive career in pensions spans over 30 years covering a wide range of senior management and consulting roles. She started her career in an independent pension consulting business, providing actuarial, technical and administration services to corporate clients; later becoming the shareholding CEO.  Lynne has an open, intelligent and constructive approach to trusteeship.

     

    Lynne graduated Masters in Business Administration in 1995. She is an Accredited Member of the Association of Professional Pension Trustees. Lynne is currently an independent trustee on a number of prominent UK DB and DC schemes.

  • Alison Bostock

    Alison Bostock | PTL Governance Limited

      

     

    Alison joined PTL as a Client Director in 2015 with 25 years’ experience in actuarial, investment and DC consulting. She was appointed to the board of directors in 2017. In her previous role as a principal and scheme actuary at Punter Southall, she advised trustees of open and closed schemes ranging in asset size from around £25m to over £500m.

     

    She has dealt with and advised a wide variety of scheme sponsors including quoted companies, private equity-backed and family-owned businesses as well as charities and other not for profit organisations.

     

    As a qualified actuary and an Accredited Member of the Association of Professional Pension Trustees, Alison has considerable technical knowledge of DB funding and investment strategies but always remains focused on the desired outcome. She is adept at building strong relationships with sponsors and advisers, as well as with fellow trustees.

Meet the team

Timothy Ball
Mercer DB Master Trust Lead
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    Tim runs Mercer’s DB Master Trust. He is responsible for onboarding new clients and managing relationships with the participating employers.

Andrew Ward
Leader Risk Transfer, DB journey planning and consolidation
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    Andrew helps clients understand the range of options to find the right strategy to meet their needs. He has been involved in ground-breaking transactions and is a regular speaker at industry events.

Helen Hope
Investment Consultant and Head of UK fiduciary clients at Mercer
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    Helen advises clients on investment strategy and implements this using Mercer’s fiduciary management solutions. She ensures the solutions are well diversified and good value for Mercer.

Andrew Simpson
Corporate Consultant
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    Andrew helps employers with pension and employee benefit solutions. He helps clients of all sizes and sectors reduce risk, costs and management time through innovative solutions.

 

 

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