A Master Trust is, put simply, a multi-employer occupational pension scheme (set up under a private trust). Master Trusts have been around for many decades but a new breed of Master Trust grew in number and popularity with the advent of auto enrolment in 2012. Around 10 million more savers were forecast to enter the workplace pensions market and Master Trusts offered a great solution.
For employers, the beauty of a Master Trust is a reduced governance burden compared to ‘in-house’ occupational pension trusts. Master Trusts can also offer better value for money compared to other alternatives such as Group Personal Pensions (GPPs). The pensions industry has leveraged its vast experience of pension provision to design some focused ways forward through Master Trusts, particularly in the DC environment.
Any decision you make which involves company and employee money needs careful thought and attention. But once you have worked out your requirements, you can undertake a ‘sourcing’ exercise to find the best fit for you and your employees. a short-listing exercise will be required to narrow the market of 26 Commercial Master Trusts to those with the closest alignment to requirements. This is where expert guidance comes in.