Question 1

What is a master trust?

Accepted Answer

Master trusts are a multi-employer occupational pension arrangement whereby each employer has its own section within the master trust. There is one single legal entity with a single governance board (which is independent of the participating employers). This governance body typically has responsibility for investment options, service provision and communicating with the members.

There are a number of different UK master trusts. Master trusts reduce the employer cost and governance burden of providing defined contribution pensions to employees, whilst still retaining the best advantages of a trust. In addition, the arrangement enables the members of the master trust to benefit from economies of scale through consolidated governance and advisers and cost pooling of investments.

Question 2

What services are offered through a master trust?

Accepted Answer

Each master trust scheme will vary. LifeSight provides a complete solution including the following services:

Independent governance including compliance with regulations, appointment of trustees, adapting to legislative changes and providing management information to employers
Full administration and communication services including member support via a range of channels, all statutory communications and implementation of a personalised member engagement strategy
Investment services including selection of investment funds and default strategies
Transition services to move member records and existing assets to the master trust
Retirement options including drawdown, lump sum and annuity, supported by a guidance process to help members make informed decisions at the appropriate time for them

At LifeSight, we understand the need to continually evolve our offering in order to stay at the forefront of the master trust market. We monitor member usage and have feedback channels for both employers and members, which we use to help develop our service offering continuously.

Question 3

What reasons do schemes have for considering master trusts?

Accepted Answer

With an ever-increasing compliance burden and rapidly growing assets, particularly defined contribution (DC) assets, many employers (and some trustee boards) no longer have the resource, expertise or desire to carry on managing their own schemes. They are looking to master trusts in particular because they’re seen as a high quality, well-governed option.

Other reasons for considering master trusts include a need to reduce employer costs, a desire to improve member engagement levels with pensions and provide a more comprehensive communications experience, or a wish to reshape the pension arrangements, for example, by transferring tranches of legacy deferred members or set up a new DC scheme.

Certain master trusts, including LifeSight, can also act as a facilitated option for members who wish to transition into a flexible drawdown arrangement where this is not supported through their employer’s workplace scheme.

Question 4

What makes LifeSight different?

Accepted Answer

Low-cost, high-performing investment options for members, leveraging WTW’s independence and the latest innovative thinking from our specialist teams
Cutting-edge member engagement concepts including a richly functional app, intuitive modelling tools that work across diverse populations and a highly personalised approach to communications that reacts to how often and in what way a member interacts with LifeSight
An entirely independent trustee board comprised of experienced industry professionals aligned to member’s interests and committed to the highest standards of governance
A proven track record in high quality administration services, with extensive automation and online functionality
Wider financial wellbeing tools and support to help members build a holistic picture of their financial situation

Question 5

Does LifeSight provide post-retirement services to members?

Accepted Answer

Yes – flexible decumulation options are available to all LifeSight members. Members have full flexibility to withdraw their savings as and when they need to, with comprehensive ongoing support and tools to help them choose investments and understand how long their money may last.

LifeSight’s post-retirement solution is also available on a standalone basis as a signposted option for members wishing to access decumulation options by transferring from their employer’s workplace scheme.

Question 6

How do master trusts charge for their services?

Accepted Answer

Generally speaking, master trust members meet the running costs of the scheme.

Question 7

What investment options are offered within LifeSight?

Accepted Answer

The LifeSight fund range has been designed to deliver value for money for members and leverage WTW’s best ideas. It offers diversification of asset classes, implemented on a passive basis to deliver higher expected returns at a lower cost (relative to simpler structures) for each unit of risk. Diversified growth options are a key part of the investment solution as they are capable of delivering growth for members but with lower volatility.

Our main investment default has a very strong past performance track record since inception. Members also have other lifestyle and freechoice options to choose from according to their risk appetite and how involved they want to be in managing their investments. All the investment options are monitored and regularly reviewed by the LifeSight Trustee to ensure they remain appropriate for members.

Question 8

How long does it take to transition to a master trust?

Accepted Answer

The master trust onboarding process typically takes about 6 months depending on the extent of the pre-transition work required, including the potential need for consultation between the sponsoring employer, trustees and employees.

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