Towers Watson has launched an independently governed defined contribution (DC) master trust in the UK and appointed 25-year industry expert, Fiona Matthews, to lead it. The master trust will be governed by an independent trustee board which is to be chaired by Donald Brydon CBE.
Paul Morris, EMEA head of Towers Watson, said:
“We have a very long and successful history of working in partnership with our clients in the UK and they have told us what they want for their DC plans and which types of long-term savings vehicles would work well for them in the future. While cost-effectiveness and governance are clear priorities, what they want is to provide 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. We believe this approach, under Fiona’s leadership, makes for a different and compelling offering which is unavailable anywhere else. We are delighted that Donald will chair the trustee board and look forward to benefiting from his considerable experience.”
Towers Watson’s 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. It allows 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.
According to Towers Watson estimates, UK DC assets will grow by around 11% 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% 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, said:
“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.”
Fiona, 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. Her experience includes leading corporate development for Resolution and being a member of its Audit and Risk Committee; prior to that she directed Strategic Partnerships for Royal & Sun Alliance. In both roles Fiona was a statutory director of numerous life company boards.
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