A big rush by employers to move their DC occupational trust pension schemes to Master Trusts is expected as the UK begins to ease lockdown and employees return to work post-furlough, according to Hymans Robertson. The pensions and financial services consultancy has seen enquiries into making the move to Master Trust double in the last few months. It expects these enquiries to translate into action as firms look at ways to reduce costs and retain staff as well as reduce regulatory burdens.

Michael Ambery, Head of DC Provider Relations, Hymans Robertson, says:

“There has been a good flow of schemes moving to Master Trusts during lockdown. Our analysis from the market shows Master Trust membership increased by at least a third during the last three months and asset shift commitment to the Master Trust market rose by over £4bn.

“But we believe this is just the opening of the floodgates.  Having seen enquiries about Master Trusts double over the last few months we are fully expecting a surge of movement into them when the restrictions are finally lifted.  Businesses will be making decisions to help their continued success and survival and it would be a sensible move for employers to consider.  Moving to a Master Trust can help bring down costs as we head towards economic difficulties from the fallout of the pandemic.  This surge could well last through to the end of 2021.

“We’ve already seen some high-profile employers issue new terms and conditions to staff, which gives the flexibility to change the pension contribution structure.  This could be something that other firms look at too. The use of a smaller occupational trust to support members is not as good as the Master Trust framework and the value of the proposition including infrastructure and regulatory oversight may well be seen as more attractive.

“Providers have been seeing an increase in enquiries as employers look at ways to reduce both the regulatory burden as well as lowering costs as they brace themselves for the anticipated economic downturn.”