Question 1

What is a master trust?

Accepted Answer

Master trusts provide a multi-employer occupational pension arrangement whereby each employer has its own segment 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.

Master trusts reduce the employer cost and governance burden of providing pension savings 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 but LifeSight provides a complete outsourcing 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 where clients can choose from a menu of options depending on their needs and budget
Pre-retirement offerings 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 companies (and some trustee boards) no longer have the resources, 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.

Question 4

What are LifeSight’s differentiators?

Accepted Answer

An independent trustee board comprised of experienced industry professionals aligned to member’s interests and committed to the highest standards of governance
Market-leading administration services that are provided entirely in-house and are highly automated and efficient
Cutting-edge member engagement concepts including intuitive modelling tools that work across diverse populations, and a personalised, innovative approach to communication. Our tools react to how often and in what way a member interacts with LifeSight
Low-cost, high-performing investment options for members, developed using the latest innovative thinking from our global specialist teams
Wider benefits platform with enhancing elements such financial wellness and financial advice

Question 5

How do master trusts charge for their services?

Accepted Answer

Generally speaking, master trust members meet the running costs of the scheme. This is levied as a basis point charge on funds under management.

Question 6

What is the structure of the investment funds being offered within LifeSight?

Accepted Answer

The LifeSight fund range has been designed to provide excellent value for money for members, offering 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 external platform means that we are not tied to any investment manager or insurance company and it offers a transparent fee structure meaning all cost savings are passed directly onto members.

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