The UK has moved to standardise documentation for defined benefit (DB) master trusts as it seeks to raise awareness of consolidation options.

The “self-certificates” concept for master trusts is a joint initiative between the Department for Work and Pensions (DWP) and the Pensions and Lifetime Savings Association (PLSA), the UK trade body for pension funds.

The self-certificates are a standardised template designed to enable DB master trusts – multi-employer schemes for non-related sponsors – to provide clear information on the key features of such arrangements for trustee boards that are considering consolidation.

Guy Opperman, minister for pensions and financial inclusion, said the new documents would “make it easier for pension scheme trustees and employers to consider if a master trust is right for them”.

“Consolidation is key to achieving value for money – driving lower costs and opening doors to wider investment opportunities,” he added. “I encourage all providers of defined benefit master trusts to submit a self-certificate.”


Guy Opperman, minister for pensions and financial inclusion

The PLSA’s Joe Dabrowski, deputy director for policy, said: “Schemes of all sizes can be run well and offer value for money, but for those schemes that are interested in consolidation we hope this new self-certification process will facilitate informed discussion.”

In a joint press release, the DWP and PLSA emphasised that the self-certificates were “not an assessment of the quality of the scheme”, nor did they contain all information relevant for a proper due diligence process. Instead, they are intended as a “starting point” for trustees.

The self-certificate template was designed by an industry working group that included representatives from the DWP, the PLSA, Abrdn, Deloitte, Hymans Robertson, Mercer, the Pensions Management Institute, Punter Southall, TPT, and Travers Smith.

Lindsay Davies, trustee secretary at Citrus, a DB master trust run by consultancy group Hymans Robertson, said the self-certification scheme “fully supports the benefits and advantages of master trusts as a viable alternative for standalone DB schemes by providing it with a stamp of authority”.

He added: “It’s just the encouragement smaller DB schemes need to think long term and consider their future funding and governance needs.”

David Hepplewhite, partner at Mercer, argued that “the time is right” for trustee boards and sponsoring employers to consider the benefits of master trusts and other consolidation paths.

“As the government pushes for greater consolidation in the UK pensions market, reflecting trends seen in Australia and the Netherlands, we believe DB master trusts will play an increasingly important role in helping to achieve this,” Hepplewhite said.

The government and the Pensions Regulator (TPR) have been encouraging consolidation among the thousands of smaller schemes operating in the UK, with a particular focus on DB and defined contribution funds with less than £10m (€12m) in assets.

In 2018 the DWP published a white paper exploring the benefits of consolidation through paths such as DB master trusts, commercial consolidation providers such as The Pension Superfund, and insurance options.

The self-certificate template can be found on the PLSA’s website.

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