Personal Pension  

Corporate advisers favour master trusts: Friends Life

The head of corporate benefits marketing for life and pensions provider Friends Life, said as a result of the Pensions Regulator and department for work and pensions putting increasing pressure on trustees of defined contribution schemes, governance was becoming an absolute priority.

At a time when auto-enrolment is a key focus for employers, Mr Palmer said many corporate advisers had started to demand more master trust schemes to help provide clients with a pension arrangement with professional trustee backing.

A master trust functions as a collection of funds from individual investors that are pooled together in order to obtain wholesale prices and rates unavailable for regular investors.

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To meet this growing demand, Friends Life’s offering will see national firm Pitmans provide trustee services, KPMG has been selected as the investment adviser and Squire Sanders is the legal adviser to the fund. Friends Life will provide the admin and the platforms.

It can be used by small or large employers, who can choose between core and enhanced versions. The core master trust will benefit employers requiring a quality, independently governed pension offering just under 20 externally managed funds.

The enhanced version can be tailored to meet the needs of an employer requiring a higher level of flexibility, such as white-labelling of communications materials and the microsite.

Mr Palmer said: “We must do more to get people saving more. We think because of the product’s flexibility and the fact it is backed by professional, independent trustees, the master trust market will grow significantly.”

His comments came as listed national advisory firm Lighthouse also launched a master trust for auto-enrolment.

Called the Lighthouse Pensions Trust, this will be managed by AllianceBernstein, with target date funds run by BirthStar. The professional trustee company behind this will be the Eversheds-owned Bridge Trustees.

Employers can personalise their component of the trusts, and the Lighthouse App, and benefit from assistance with planning, human resources and payroll administration.

Malcolm Streatfield, chief executive of Lighthouse, said: “This is aimed at the employers of middle Britain, for whom market capacity may otherwise be an issue. It makes it easy for employers to meet their legal obligations within a governance structure focused on good member outcomes and value for money.