Advisers favourable towards mastertrusts for auto enrolment but majority uncertain

Download press release

For immediate release: Thursday 6 March 2014

Over three quarters of IFAs believe mastertrusts offer high standards of governance

Nearly a third of advisers (31%) think mastertrusts are preferable to insurers for auto enrolment but over half (52%) are uncertain, indicating a potential knowledge gap, according to new research conducted by independent financial product research company Defaqto on behalf of NOW: Pensions.

Of the 264 advisers questioned, just 17% say they favour insurers but the majority say they “don’t know” whether mastertrusts are favourable to insurers for auto enrolment.

Of those that prefer mastertrusts, the reasons given were:

  • 77% think the structure enables even small employers to benefit from high standards of governance
  • 70% say the independent board of trustees at mastertrusts ensure that the scheme is being run in the best interests of members at all times
  • 65% say mastertrusts ensure that scheme governance is robust but costs are kept low
  • 55% say that within mastertrusts all members are treated equally – whether active or deferred
  • 47% consider mastertrusts be to generally more cost effective

Of those that favour insurers, the main reason given, cited by 69% of advisers, is ease of implementation as many clients have existing schemes in place with insurers which they can extend to the rest of their workforce. Other reasons given are greater fund choice (56%) and brand recognition (56%).

Morten Nilsson, CEO, NOW: Pensions said: “Mastertrusts have an important role to play in the auto enrolment market and advisers are right to highlight the fact that the structure can provide high standards of governance at a low cost. But, not all mastertrusts are the same and advisers need to make sure the mastertrust they select for their clients is robust and fit for purpose.”

Nilsson continues: “The NAPF’s PQM READY standard is a good benchmark of quality as it identifies mastertrusts that are well governed with low charges and good communications. The Pensions Regulator is also currently looking at ways to ensure consistent standards across all mastertrusts.”

–     Ends     –

For further information:

Amy Mankelow
NOW: Pensions
Tel: 07941 105879
amy@nowpensions.com

Victoria Leyton
Lansons Communications
Tel: +44 207 294 3620
nowpensions@lansons.com

Notes for editors:

Research conducted online by Defaqto between 25th November and 5th December 2013.

Data from The Pensions Regulator shows that 44 mastertrusts have been set up in the UK over the past 2 years.

NOW: Pensions www.nowpensions.com @nowpensions

NOW: Pensions is an independent, multi-employer trust serving thousands of employers and hundreds of thousands of employees from a wide range of sectors.

A subsidiary of one of Europe’s largest pension funds, Danish pension scheme ATP, NOW: Pensions offers a simple and cost effective workplace pension solution direct to employers and via advisers and the payroll sector.

In April 2013, NOW: Pensions became the first master trust to attain the NAPF’s new PQM Ready Standard. The benchmark shows employers that NOW: Pensions is a well governed pension scheme with low charges and good member communications.

The NOW: Pension Trustee Directors, whose role is to safeguard the interests of members, comprises well-known industry figures with different areas of expertise:

  • Christopher Daykin, former Government Actuary
  • John Monks, member of House of Lords and former General Secretary of ETUC and TUC
  • Win Robbins, former Head of European Fixed Income at Barclays Global Investors
  • Imelda Walsh, former Group HR Director of Sainsbury’s
  • Nigel Waterson, former Shadow Pensions Minister

Charges are just £1.50 per month administration charge (reduced administration charge of £0.30 – £1.00 to be applied during auto enrolment phasing for lower earners) plus a 0.3% annual product investment management charge, with no hidden charges.

Defaqto www.defaqto.com/adviser @DefaqtoAdviser

Defaqto is an independent researcher of financial products, focused on providing intelligence to support better decision-making. At its heart is the UK’s largest retail financial product and fund database which it maintains by collecting data from across the whole market, and uses its expertise and insight to analyse this data and make it comparable.

From this, Defaqto creates a range of products and services – ratings, software solutions, consultancy services, data services, and publications and events – to deliver this information in a meaningful way. Defaqto’s intelligence facilitates better financial decisions and greater effectiveness in the creation, management and distribution of financial products.

Download press release

I've known ATP for many years and have enormous respect for the effectiveness of their investment strategy. I'm convinced that NOW: Pensions can become a major player in the UK and look forward to being a part of that success. — Chris Daykin, the former Government Actuary
Over a short period of time, NOW: Pensions has established itself as a respected and credible player in the UK workplace pensions market attracting thousands of employers and hundreds of thousands of members. Joining the team at such a crucial time… — Jocelyn Blackwell, Founder of Dunnett Shaw and Raising Standards in Pensions Administration
ATP comes to the UK pensions world with the highest commendations from the Danish trade unions, employers and government. NOW: Pensions' offering in the UK will be high quality, low cost, and honest and I'm proud to be associated with it. — John Monks, member of House of Lords and former General Secretary of ETUC and TUC
I firmly believe in NOW: Pensions' principle that everyone deserves the right to a better retirement. I look forward to being part of the team which aims to achieve this in the UK. — Win Robbins, former Head of European Fixed Income Barclays Global Investors
I'm excited by the opportunity to help bring to the UK auto-enrolment market NOW: Pensions, a customer-friendly and responsive trust-based alternative to NEST and to contract-based offerings. — Chris Daykin, the former Government Actuary