On the go: The trend of transferring members of defined contribution schemes to master trusts is expected to continue in 2021, with 50 per cent of employers or trustees planning such moves, or at least signpost these schemes as a retirement option for their members.
The survey, conducted by Sacker & Partners, which polled 66 employers and trustees, also showed that 25 per cent of the respondents have already moved to a master trust.
Pensions Expert reported previously on this trend, with the majority of master trusts targeting DC schemes in a bid to boost their assets under management, leading to heightened competition in the marketplace.
Helen Ball, Sackers’ partner and head of DC, noted that the survey results do not come as a surprise.
“Originally, the move to a DC master trust was thought of as a wholesale move — transferring all of the members from one DC vehicle to another,” she said.
“However, recent experience, and our survey, have clearly shown that projects are becoming increasingly more sophisticated.
“A large range of different projects are now being considered, including transferring deferred members only or DC sections of hybrid schemes to a DC master trust.”
Ball explained that this trend will continue for some time, since even if employers are not looking to transfer right now, “they are becoming more interested in the role that master trusts could play in providing support to employees at retirement”.
She added: “When coupled with appropriate guidance, this can be a useful way of providing employees with access to drawdown arrangements without having to add more complexity into the employer’s own pension scheme.”
