Multi-employer defined contribution schemes are more important than ever. In 2020 the Pensions Regulator reported that the number of DC schemes had fallen by 12 per cent, as more employers accepted that better value was on offer by joining a master trust, while master trusts themselves had been whittled down by a more stringent regulatory regime.
By the end of 2020, one in four FTSE 350 companies were using multi-employer DC providers, ensuring these solutions are embedded in the industry for good.
It was also a year for innovation by multi-employer DC providers, including the transfer of deferred members or DC sections of hybrid schemes to a master trust.
In September, the Department for Work and Pensions issued a consultation on statutory guidance and regulation that included views on DC consolidation activity and work to overcome barriers to merging schemes.
The consultation will likely open the door for more opportunities to expand multi-
employer DC schemes in future, with the possibility that there will be a statutory obligation for smaller schemes to amalgamate in the interests of members.
With greater interest in multi-employer DC schemes comes greater regulatory oversight.
Last year, schemes were expected to offer consumer protection and empowerment through increased disclosure obligations and the introduction of the pension dashboard. Additionally, multi-employer schemes need to address the new requirements for climate change risk disclosures.
This category proved tough to find a winner in as providers all demonstrated strengths in different areas. Ultimately, innovation represented by work on increased transparency won out.
Our judges also looked favourably on companies that had overhauled their member services, and those that were able to garner strong member feedback, while consistent performers were also praised.
Winner: Legal & General
Highly Commended: TPT Retirement Solutions