Mercer has announced the launch of its master trust for defined benefit (DB) pension schemes in the UK.

The Mercer DB Master Trust aims to offer DB scheme sponsors the potential for improved governance and economies of scales to deliver better outcomes for members.

Mercer will be responsible for providing all services under the master trust, including investment with fiduciary management, journey planning, actuarial services, covenant assessment, scheme management and administration.

Trusteeship will be provided by independent professional trustees, namely PAN Trustees, Independent Trustee Services (ITS) and PTL.

Scheme employers remain responsible for the funding of their scheme.

“With a clear journey plan agreed up front with the client, the Mercer DB Master Trust will take on the day-to-day operations of the scheme,” commented Mercer UK head of risk transfer and journey planning, Andrew Ward.

“This way, sponsoring companies can focus on strategic issues such as reducing the longer-term risks the scheme presents to the balance sheet and the ultimate settlement of the benefits.”

The Mercer DB Master Trust has been established from the Federated Pension Plan (FPP), an existing master trust initially set up by JLT that has around £260m of assets and 73 participating employers.

The FPP traditionally focused on public sector outsourcing arrangements.

Ward continued: “By building on the strong base of the FPP and adding the expertise and scale offered by Mercer, the Mercer DB Master Trust provides a smart solution for private sector clients looking to manage legacy DB liabilities.

“As part of strengthening the offering, we are delighted to announce the selection of ITS and PTL as additional professional trustees to work alongside PAN Trustees who has been the Trustee of the FPP for over 15 years.”

Mercer Wealth UK leader, Benoit Hudon, said that the newly launched master trust offers a “simple off-the-shelf solution” to sponsors that uses Mercer’s scale and capabilities to “help potentially reduce fees and improve outcomes”.

He added: It uses the buying power of our fiduciary management platform, with around £250bn of global assets under management, passing these savings back to clients.

“It also gives members access to the largest administration of private sector pensions in the UK, which, combined with offerings like Mercer Money, provide a unique and unmatched experience to individuals.”

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