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.
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.
A DB Master Trust solution can cut out complexity and deliver efficiencies in 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:
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:
Contact us now to find out more about the Mercer DB Master Trust and how it might benefit your scheme.
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.
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.
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.
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’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 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.
Q&A video about the trusteeship of Mercer’s DB Master Trust
Transcript:
Tim: Hello and welcome to this short Q&A video about the trusteeship of Mercer’s DB Master Trust. I’m Timothy Ball. I am the DB Master Trust Lead. I oversee the trust for Mercer as the Plan Provider. I’m here today with Rachel Croft.
Rachel: Hello
Tim: Rachel is a Director at Independent Trustee Services and is the Chair of Trustees for the Mercer DB Master Trust. Rachel please could you tell us a bit more about yourself and your experience in the pensions industry.
Rachel: Yes of course Tim. My career in the pensions industry spans over twenty years. I originally qualified as a solicitor. I’m a Fellow of the Pensions Management Institute and an Accredited Member of the Association of Professional Pensions Trustees. In my role at Independent Trustee Services, I am a Lead Director on professional trustee appointments for pensions schemes with assets between £25 million and £2.5 billion. And, as you mentioned in your introduction, I am the Chair of Trustees for the Mercer DB Master Trust.
Tim: How is the Master Trust governed and how do you see your role?
Rachel: Well as you mentioned Tim, Mercer is the Plan provider, which means it owns, advises and operates the Master Trust, but importantly the scheme is governed by an independent board of trustees. The board is made up of three professional trustees from three different independent trustee firms: Independent Trustee Services, PTL and Zedra Governance. As with all trust-based pension schemes our primary role is ensure that our members’ pension benefits get paid when they fall due and we do this by working collaboratively with the sponsoring employers to agree a long term plan to achieve each employer’s ultimate goal, be that buyout or a run-off strategy that maintains security for our members.
Tim: You mentioned that the board is made up of three independent professional trustees. Why is that important?
Rachel: Well over my career the job of a pension scheme trustee has become increasingly complex. Trustees must make decisions about funding and investment strategy, comply with standards of risk reporting, meet their responsibilities in relation to environmental, social and governance or ESG investing, monitor the scheme sponsor’s covenant, and keep on top of regulatory changes. This increase in governance burden has seen a rise in the numbers of schemes requiring the services of professional trustees so as to help manage this complexity. Having three professional trustees from three different firms ensures good governance. We each have our own strengths and bring our own opinions formed from our experiences of sitting on the trustee boards of multiple schemes. This diversity improves the quality and the objectivity of the decision making process. Ultimately good governance is beneficial to both members and employers.
Tim: Finally, what would you say to trustees who are considering transferring their members to a Master Trust?
Rachel: I would say that it is normal to feel some trepidation. After all as trustees you bear the responsibility for looking after your members, in some cases for decades. From a regulatory perspective, you can be reassured that all trustees, including those of a master trust, are subject to the same regulations and have the same obligations to members. But I would say, still do your research. Find out which firms have been appointed to the board of the master trust you are considering. You should be able to meet those trustees face to face if you wish, and feel free to ask the kind of questions you need to get comfortable in handing over the baton.
Tim: Rachel, thank you for taking part in this Q&A. I hope that’s been helpful. Thank you very much for listening. For further information on all things master trust related, take a look at our website https://www.uk.mercer.com/db-master-trust
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Timothy Ball Mercer DB Master Trust Lead |
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Andrew Ward Leader Risk Transfer, DB journey planning and consolidation |
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Helen Hope Investment Consultant and Head of UK fiduciary clients at Mercer |
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Andrew Simpson Corporate Consultant |
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