Partner Jane Kola comments in Pensions Expert on the rise of DC pension plans switching into master trusts
More and more blue-chip employers are looking to transfer their defined contribution pension plans to the new breed of master trusts. The Vodafone UK DC Pension Plan is the latest to move all members’ accounts, amounting to £1.4bn, into LifeSight. The transaction is expected to be finalised by the end of March 2020.
Vodafone’s switch into a master trust exemplifies a trend for consolidation, even in larger own-trust DC arrangements. While the rush for scale in the auto-enrolment-focused end of the master trust market has seen providers merging with one another to accumulate small employers’ business quickly, other providers have chosen to compete for big names, emphasising their range of services to win profitable contracts.
Jane Kola commented that she expects “many will follow in Vodafone’s footsteps. These products offer a good range of funds very low charges and glossy member communications. Scale equals lower costs per member, which keeps the charges down and reduces costs for the employers as well as the risks of seeking to run your own scheme.”
Read Jane’s comments in Pensions Expert.
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