Employers and trustees of Defined Contribution (DC) schemes have common challenges:
- Oversight. As more companies set up DC schemes to help their employees save for retirement and meet regulatory requirements such as auto enrolment, they’re faced with decisions about the level of support and oversight they should provide.
- Lack of time and resources. Many companies want to provide strong oversight and governance, but the regulatory pressures and increased responsibility this entails makes it difficult to recruit and retain trustees with the required level of knowledge, commitment and expertise. This has resulted in a trend to outsource responsibility to employees via contract-based DC solutions such as stakeholder plans, which provide minimal guidance for members. In some cases, this trend has led to confusion and inappropriate employee retirement-planning decisions.
- Choice. Employers want their own investment strategy and scheme-specific design options. But they also want to enjoy the economies of scale that result from the pooling of members’ assets from multiple schemes, while spreading legal, administrative and accounting costs.
Neither contract-based (such as stakeholder plans) nor trust-based DC schemes can fully address these challenges. But we can.
Our Master Trust solution brings significant value to DC scheme sponsors:
- Third-party investments and administration, with independent trustee oversight
- The ability to incorporate your operating processes and legacy DC funds
- Employers can create their own investment strategy
- Employees have a choice of funds and leverage our global experience in target date strategies
- Employees get the oversight and assistance they need to help them make better retirement-planning decisions