Transfers to DC master trusts to continue into 2021 and beyond, says Sackers survey
Transfers to DC master trusts will continue well into 2021, according to the results of a new survey by Sackers, a UK specialist law firm for pensions and retirement savings.
The survey showed that 25 per cent of respondents had already moved to a DC master trust, with 50 per cent planning to either do so in the future, or at least signpost a DC master trust as a retirement option for their members.
Helen Ball, Sackers partner and head of DC, says: “These results do not come as a surprise. Originally, the move to a DC master trust was thought of as a wholesale move; transferring all of the members from one DC vehicle to another. However, recent experience, and our survey, have clearly shown that projects are becoming increasingly more sophisticated. A large range of different projects are now being considered, including transferring deferred members only or DC sections of hybrid schemes to a DC master trust.”
“We expect this trend to continue for some time. Even where employers are not looking to transfer their members to a master trust right now, they are becoming more interested in the role that master trusts could play in providing support to employees at retirement. When coupled with appropriate guidance, this can be a useful way of providing employees with access to drawdown arrangements without having to add more complexity into the employer’s own pension scheme.”
Ball says: “DC master trusts are now firmly embedded in the fabric of the industry and will continue to be an intrinsic component in the delivery of benefits for the majority of employers and trustees in the future. Our advice to any considering such a move is simple: involve all parties early on in the discussion and work together as a team to create an efficient and well managed project.”