Towers Watson has launched an independently governed defined contribution master trust in the UK and appointed industry expert, Fiona Matthews, to lead it. The master trust will be governed by an independent trustee board chaired by Donald Brydon CBE.
Towers Watson says its UK Master Trust is aimed at sponsors looking for the independent governance and quality of a trust-based scheme with the cost-effectiveness of contract-based pension provision, allowing for larger-scale pooling of assets than traditional single-employer trusts, resulting in economies of scale and increased purchasing power that benefit both employers and members.
Matthews, who has been with Towers Watson for seven years, is a qualified actuary and de-risking expert and was previously managing director of its UK risk solutions team. She previously led corporate development for Resolution, prior to which she was director of strategic partnerships for Royal & Sun Alliance.
Towers Watson estimates, UK DC assets will grow by around 11 per cent annually to triple in size within the next decade. It attributes this predicted growth to auto-enrolment legislation, new DC pension flexibilities, and the imminent increase to 8 per cent in the minimum contribution. As a result, it says the UK master trust market will also grow significantly, accelerated by continued defined benefit scheme closures and some members using the new flexible access rights to transfer to DC.
Fiona Matthews, managing director of Towers Watson’s master trust programme says: “As the pensions market consolidates, master trusts will become an increasingly popular option for employers wanting a high-value and flexible service with affordable running costs that can improve member outcomes now and in the future. This is what our master trust aims to deliver to companies, while also offering members a positive and highly personalised experience throughout their retirement journey, from activating saving to drawing benefits.”
Towers Watson EMEA head Paul Morris says: “While cost-effectiveness and governance are clear priorities, what employers want is a quality member experience with design and functionality that extends beyond today’s DC pensions needs and into tomorrow’s liberalised savings environment. We will address these priorities through a scalable, multi-employer master trust by combining our deep expertise in pensions administration, governance, communications and investment.”