Master Trusts cut prices by a fifth to reach authorisation targets
12 Nov 2019
Cost savings of as much as 20% could be made by pensions schemes currently moving to a Master Trust, as providers seek to build up new business following their TPR approval, according to analysis by Hymans Robertson, the leading pensions and financial services consultancy. It warns that companies considering a move to a Master Trust should act now to take advantage of attractive pricing as providers look to fulfil their authorisation targets for new business.
Michael Ambery, Head of DC Provider Relations at Hymans Robertson explains why those responsible for corporate pensions should move now:
“As Master Trust authorisation completes, it is a significant milestone on the vehicle’s path to maturity. With TPR’s stamp of approval, we’ve seen that providers are significantly lowering their prices as they work to reach the business targets they have set themselves. Any DC scheme which has previously recognised the merits of a move to a Master Trust should seriously consider whether now is the right time for a move.
“The benefits for a pension schemes of moving to a Master Trust are genuine. Savings in terms of governance efficiencies and member administration bring real efficiencies to a company’s pension function, without sacrificing member security. But, while gaining these advantages, corporate sponsors need to ensure this competitive pricing also delivers the value and service they require for employees. They must also recognise the quality offered by a Master Trust provider in comparison to the value and quality of any current arrangement and make the right decision for their own scheme.”