Using our expertise and global experience to deliver a workplace defined contribution pension that delivers good retirement outcomes for members
Outsourcing your workplace pension scheme to the Mercer DC Master Trust can deliver cost and time savings for your business and opportunities to improve outcomes for your people.
The cost and complexity of managing a DC pension fund are increasing as regulatory and governance requirements increase. At the same time, many scheme members don’t have enough saved for their retirements because they haven’t always had the right help and information to prepare.
Our DC master trust helps address these problems by providing:
Our DC master trust’s unique open architecture operating model allows participating employers access to best-in-class providers in each of their areas of specialism. Independent trustees are responsible for ongoing governance while you, the employer, keep the ability to decide on contributions.
The Mercer Master Trust (“MMT”) is authorised by the Pensions Regulator, this requires us to demonstrate that the MMT meets certain required standards.
Our independent trustee board has real teeth when it comes to governance, with the ability to change the component parts in our openly structured operating model. The Trustees meet regularly throughout the year to discuss administration, communications and investments.
Our robust governance framework ensures enhanced oversight of the investment and administration performance. Formal quarterly investment governance meetings take place to ensure investment options remain appropriate and market leading. We also undertake regular performance reviews of the administration services.
We provide regular reporting on investment performance and administration to our participating employers.
There are three pillars underlying our approach to governance and administration:
The independence of the Mercer Master Trust (“MMT”) is a key design strength, we have integrated leading components in each element of the member experience. Our administration services are currently provided by Scottish Widows and Aviva.
We select our underlying administrators using whole-of-market research based on a wide range of criteria. This approach enables us to future proof the MMT as we can switch out an administrator with minimal impact to members or without winding up the trust if necessary.
2. Enhanced service levels
Our independent approach enables us to provide truly conflict free administration. We have measureable service levels enhanced against what our administration partners provide outside of the MMT. These service levels have financial penalties attached for non-delivery.
3. Improving the member experience
We use feedback from members in addition to the information obtained from the monthly governance process to drive enhancements to the member experience.
The investment options available in the Mercer Master Trust (“MMT”) are designed to cater for all members regardless of their required level of support. Your members benefit from access to Mercer’s investment expertise, from our extensive manager research capabilities to our global portfolio construction insights.
Mercer SmartPathTM changes over the course of a member’s life and can target one of three retirement outcomes; income drawdown, annuity purchase or full encashment. The Trustees of the MMT will work with you to decide which one of these three options will be the default option for your employees, if members don’t make an investment choice this is where their pension savings will end up.
Take a closer look at recent performance here.
If members wish to select their own investments, the MMT has this covered. We have a broad fund range which is monitored and regularly updated to reflect Mercer’s best investment ideas.
We have a range of multi-asset risk-profiled funds, including the Mercer Growth fund (used in the default option), each of which targets a different level of risk and return.
For those members who wish to take full control of their savings, the MMT also offers a comprehensive range of self-select funds, covering all major asset classes and offering both active and passive management styles.
· Mercer Defensive Fund
· Mercer Moderate Growth Fund
· Mercer Growth Fund
· Mercer High Growth Fund
· Mercer Active UK Equity Fund
· Mercer Active Global Equity Fund
· Mercer Active Global Low Volatility Equity Fund
· Mercer Active Global Small Cap Equity Fund
· Mercer Sustainable Global Equity Fund
· Mercer Active Emerging Markets Equity Fund
· Mercer Active Emerging Markets Debt Fund
· Mercer Active UK Property Fund
· Mercer Absolute Return Fixed Income Fund
· Mercer Global Listed Infrastructure Equity Fund
· Mercer Cash / Mercer Active Money Market Fund
· Mercer Diversified Growth Fund
· Mercer Passive Global Equity Fund
· Mercer Passive UK Equity Fund
· Mercer Passive Overseas Equity Fund
· Mercer Passive Emerging Markets Equity Fund
· Mercer Shariah Fund
· Mercer Passive Over 5 Year Index-Linked Gilt Fund
· Mercer Passive Over 15 Year Gilt Fund
· Mercer Passive UK Corporate Bond Fund
· Mercer Passive Sustainable Global Equity Fund
· Mercer Pre-Retirement Fund
· Mercer Inflation-Linked Pre-Retirement Fund
· Mercer Diversified Retirement Fund
Our member engagement strategy ensures that the right communications are delivered to the right people, using the right channels and at the right time.
A key part of our communication and engagement approach is Mercer Money, our market-leading financial wellness platform – available as an app or website. Mercer Money uses open banking, with bank standard security, to deliver a holistic view of an individual’s finances (earnings, savings, borrowing and assets) all in one place.
Find out more about this powerful app here.
The project to implement any new scheme will be expertly managed by our highly experienced programme and implementation team from start to finish. These teams have been responsible for successfully on boarding numerous schemes.
The project will be overseen by a programme manager and managed in line with a six-stage process, following PRINCE2 methodology. The programme manager will liaise with all internal and external stakeholders and oversee dedicated specialists within the project, such as the asset transition team.
The United Nations Principles for Responsible Investment defines responsible investment as a strategy and practice to incorporate Environmental, Social and Governance (“ESG”) factors in investment decisions and active ownership.
At Mercer we believe that a sustainable investment approach is more likely to create and preserve capital value for long-term investors. In particular, we believe that climate change poses a systemic risk and that, as investors, we should consider the potential financial impacts of the transition to a low carbon economy and the physical impacts of different climate outcomes.
ESG factors are incorporated throughout the Mercer Master Trust’s investment arrangement, including Mercer SmartPathTM, in line with Mercer’s four-pillar framework.
We expect managers to consider any Environmental, Social or Governance factors that might impact the value of members’ savings and to incorporate these into their investment decision-making.
Our investment managers are expected to have strong processes in place to ensure they are voting and engaging with investee companies to protect members’ interests.
We believe that investing in sustainable themes can offer return opportunities for members and can also help to manage risks. For this reason we have allocations to specific sustainable-focused funds within our default Mercer SmartPathTM.
Although we prefer integration and engagement we want to avoid profiting from activities that don’t align with our members’ values and so we exclude these from our investments.
Consistent with our sustainable investment approach we have committed to a target of net-zero absolute carbon emissions by 20501. for our multi-asset funds and plan to reduce portfolio relative carbon emissions by at least 45% from 2019 baseline levels by 20302. This includes the Mercer Growth fund used within our default investment option.
1. Defined as absolute carbon emissions, per $M of assets under management and Scope 1&2 emissions.
2. Per dollar of assets under management. While the funds continue to maintain an investment objective of seeking long-term growth of capital and income, they also promote environmental characteristics though progressive decarbonisation with a view to achieving net zero emissions by 2050.
Tom Curtis, Workplace Savings Strategy & Commercial Leader
Employers are increasingly turning to DC master trusts to escape the increasing regulatory burden and to provide members with the expertise and services they need.
This option isn’t for everyone, and there is a great deal of variety between those that are in the market. Here are some questions to get you started:
The DC master trust:
All of the Trustees are 100% independent of Mercer, we want to ensure that the trustee board always act in the best interest of members.
Alan Pickering is Chairman of BESTrustees and Chairman of the Mercer Master Trust. He has served as a non-executive director of The Pensions Regulator and was previously a member of the Occupational Pensions Board. Alan is a trustee of a number of schemes including: The Plumbing Industry Pension Scheme which he chairs, People’s Pension and Chairman of the governance group of the Royal Mail Statutory Pension Scheme.
Dianne has been a pension trustee since 2007, before joining ITS in 2015. As an experienced DC governance specialist, she serves as an independent chair and member on a range of boards and committees, including master-trusts, single employer schemes and Independent Governance Committees. These roles have enabled her to build a deep knowledge of DC pensions on both a strategic and technical level, focusing on value for money as a core governance objective. Prior to trusteeship, her executive career was in investment management. Her specialist skills are in communications and member engagement.
Zahir is a chartered accountant. Prior to joining BESTrustees in June 2008, Zahir was a partner in a major accountancy practice, where he established their highly successful Pensions Group. As a Fellow of the Institute of Chartered Accountants, he is currently Chairman of the Institute’s Pensions Sub-Committee and immediate past Chairman of the Pensions Research Accountants Group.
With her background in customer service, Lisa is very focused on the member and has led reviews of both member communications and service improvements with administrators. As well as serving on trustee boards since 2016, Lisa has chaired DC sub-committees and is a member of the MMT Administration sub-committee. Lisa joined BESTrustees in July 2019, and since has been appointed to seven clients with a mix of master trust, DB and hybrid DB/DC schemes. Prior to joining BESTrustees, Lisa spent 12 years working for LV-one of the largest insurance companies in the UK, latterly as Service Director for the Life & Pensions business.
Giles has more than 30 years’ experience in the Pensions industry and has worked for consultancies, an insurance company and an asset manager. Prior to joining Capital Cranfield, Giles worked at HR trustees as a professional trustee for seven years. Giles currently works with DB and DC schemes and master trusts and sits on one independent governance committee (IGC). He acts as chair to a number of schemes. He currently sits on seven boards, an IGC and two master trusts.
This information is based on our current understanding of legislation, taxation and HMRC practice which may change in the future. It is for information only and is not personal financial advice. If you require financial advice you should seek this from an authorised financial adviser. The value of investments can go down as well as up, so you could get back less than you invest.