Investment consultant Mercer has launched its UK Mercer DB Master Trust, which offers defined benefit (DB) pension plan sponsors the potential for “enhanced governance and economies of scale to deliver better outcomes for members”, it said.
Under the trust, Mercer will be responsible for providing all services including investment with fiduciary management, journey planning, actuarial services, covenant assessment, scheme management and administration, with trusteeship provided by independent professional trustees.
The employer would maintain ultimate responsibility for the funding of the scheme, an announcement stated.
This new solution adds to Mercer’s existing advisory and fiduciary offerings and ensures clients can access a full spectrum of approaches to select the best fit for their individual governance needs, it said.
Benoit Hudon, leader of Mercer’s wealth business in the UK, said: “Managing employee pension schemes has become increasingly complex and many organisations suffer from time or cost constraints.”
He said these challenges are “particularly acute” for smaller or mid-sized legacy DB schemes where often dedicated in-house expertise lacks, while access to best-in-class capabilities can be expensive.
He added that the trust will “potentially reduce fees and improve outcomes”, while also giving members access to the largest administration of private sector pensions in the UK.
The Mercer DB Master Trust has evolved from the Federated Pension Plan (FPP), an existing and long-established master trust initially set up by Jardine Lloyd Thompson that currently has around £260m (€280m) of assets and 73 participating employers.
Additionally, Independent Trustee Services (ITS) and PTL have been appointed as additional professional trustees to work alongside PAN Trustees, which has been FPP’s trustee for more than 15 years.