Legal & General’s (L&G) £54bn Mastertrust has taken on Royal Mail’s legacy defined contribution (DC) pension scheme in the UK’s largest master trust transfer.
The transfer involves almost 100,000 deferred members and £2.45bn in assets under management from the Royal Mail Defined Contribution Plan.
Law Debenture’s Elizabeth Hartree, chair of the Royal Mail Defined Contribution Plan’s trustee board, said: “For both the trustees and Royal Mail, we wanted a new home which was well suited to our membership and could readily take on a large population and significant assets. It was clear that L&G was that home.
“Throughout the process, our priority has been to provide a seamless experience for members while enhancing the pension proposition available to them. We look forward to working with L&G to help our members achieve better long-term financial outcomes.”
The move comes as employers are beginning to reassess their DC offerings, with regulators working on a Value for Money regime that aims to raise governance and performance standards across the pensions sector. The government also wants DC master trusts to reach a minimum size of £25bn.
According to a press release from L&G, the Royal Mail trustees selected the provider based on a range of factors, including its administration and investment offerings.
The default investment portfolio is constructed from L&G’s Lifetime Advantage Funds range, and includes a target allocation of 15% to private market assets. This default arrangement reached £30bn in assets under management earlier this year.
The L&G has more than six million members and £54.3bn in assets under administration. Since 2020, the provider has taken on more than 140 workplace schemes.
Jayesh Patel, head of UK DC distribution at L&G, said: “The appointment reflects the trust our clients place in our ability to deliver transitions of this scale, while providing strong value for money and helping members achieve better long-term retirement outcomes. We look forward to working closely with Royal Mail to help members engage with their pension savings and make informed decisions through every stage of their journey to and through retirement.”
