Your members’ future in safe hands - the Mercer DC Master Trust
Introducing the Mercer DC Master Trust
The cost and complexity of managing a DC pension fund are increasing as regulatory and governance requirements increase. At the same time, many scheme members don’t have enough saved for their retirements because they haven’t always had the right help and information to prepare.
Our DC Master Trust helps address these problems by providing:
- access to a wider range of investment choices than may be available as a sole trust.
- digital tools and engaging communications focused on holistic financial planning.
- independent governance by professional trustees.
Our DC Master Trust’s unique open architecture operating model gives participating employers access to best-in-class providers in each of their areas of specialism. Independent trustees are responsible for ongoing governance while you, the employer, keep the ability to decide on contributions.
Did you know Mercer’s DC Master Trust has?
years of experience within the DC master trust industry globally
independent administration and platform providers
years of investment performance for default option
as the date by which net zero absolute portfolio carbon emissions achieved for our multi-asset funds
Why choose the Mercer DC Master Trust?
The Mercer DC Master Trust is authorised by the Pensions Regulator. As with all DC master trust pension schemes, this requires us to demonstrate that it meets regulatory requirements for protecting members.
Our independent trustee board has real teeth when it comes to governance, with the ability to change the component parts in the DC Master Trust’s openly structured operating model. Trustees meet regularly throughout the year to discuss administration, communications and investments.
A strong governance framework ensures enhanced oversight of the investment and administration performance. Formal quarterly investment governance meetings take place to ensure investment options remain appropriate and market leading. Trustees also undertake regular performance reviews of the administration services that the Mercer DC Master Trust provides to its members.
The DC Master Trust provides regular reporting on investment performance and administration to participating employers.
The independence of the Mercer DC Master Trust is a key design strength. Its administration services are currently provided by Scottish Widows and Aviva.
The DC Master Trust selects its underlying administrators by researching the whole market based on a wide range of criteria. This approach ensures it works with the best administrators in the market today, while also future proofing the DC Master Trust for tomorrow. If necessary, the trustees can switch out an administrator with minimal impact on members and without winding up the trust.
Enhanced service levelsThe DC Master Trust’s independent approach enables it to provide administration that is truly free of conflicts. It has measurable service levels enhanced against what the administration partners provide outside the DC Master Trust. These service levels have financial penalties attached for non-delivery.
Improving the member experienceThe Mercer DC uses feedback from members in addition to the information obtained from the monthly governance process to drive enhancements to the experience for its members.
Investment options available in the Mercer DC Master Trust are designed to cater for all members regardless of their required level of support. DC Master Trust members benefit from access to all of Mercer’s investment expertise: from our extensive manager research capabilities to our global portfolio construction insights.
Mercer SmartPath changes over the course of a member’s life and can target one of three retirement outcomes: income drawdown, annuity purchase or full encashment. The trustees of our DC Master Trust will work with you to decide which one of these three options will be the default option for your employees. If your members don’t make an investment choice, this is where their pension savings will be invested.
Mercer SmartPath can target different retirement outcomes
If members wish to select their own investments, the Mercer DC Master Trust has this covered. It has a broad fund range which is monitored and regularly updated to reflect Mercer’s best investment ideas.
The DC Master Trust has a range of multi-asset risk-profiled funds, including the Mercer Growth Fund (used in the default option), each of which targets a different level of risk and return.
For those members who wish to take full control of their savings, the DC Master Trust also offers a comprehensive range of self-select funds, covering all major asset classes and offering both active and passive management styles.
- Mercer Defensive Fund
- Mercer Moderate Growth Fund
- Mercer Growth Fund
- Mercer High Growth Fund
- Mercer Active UK Equity Fund
- Mercer Active Global Equity Fund
- Mercer Active Global Low Volatility Equity Fund
- Mercer Active Global Small Cap Equity Fund
- Mercer Sustainable Global Equity Fund
- Mercer Active Emerging Markets Equity Fund
- Mercer Active Emerging Markets Debt Fund
- Mercer Active UK Property Fund
- Mercer Absolute Return Fixed Income Fund
- Mercer Global Listed Infrastructure Equity Fund
- Mercer Cash / Mercer Active Money Market Fund
- Mercer Diversified Growth Fund
- Mercer Passive Global Equity Fund
- Mercer Passive UK Equity Fund
- Mercer Passive Overseas Equity Fund
- Mercer Passive Emerging Markets Equity Fund
- Mercer Shariah Fund
- Mercer Passive Over 5 Year Index-Linked Gilt Fund
- Mercer Passive Over 15 Year Gilt Fund
- Mercer Passive UK Corporate Bond Fund
- Mercer Passive Sustainable Global Equity Fund
- Mercer Pre-Retirement Fund
- Mercer Inflation-Linked Pre-Retirement Fund
- Mercer Diversified Retirement Fund
Consolidation and saving – pre-retirement and preparation phases
(Age: 40+) Financial Education Team (“FET”) – making the most of your money
(Age: 45+) Mid-life MOT – e-learning programme
(Age: 45+) Mercer Money pension aggregation ‘dashboard’ and consolidation service
(Age: 50+) Mercer Money Nudges and money tips
(Age: 50+) Personalised video statements
(Age: 50+) FET – planning your future
(Age: 50+) Mercer Money Retirement Modeller
(Age: 50+) FET – planning for retirement
(Age: 55) Pre-Retirement seminars
(Age: 55+) Provider wake-up pack
Mercer Private Wealth or Digital Execution – serving all at decision phase
(Age: 55+) Pension Decision Service
(Age: 55+) Assessment
(Age: 55+) Guidance and advice
(State retirement age) Product implementation
Retirement – Monitoring and review
The project to implement any new scheme into the Mercer DC Master Trust will be expertly managed by our highly experienced programme and implementation team from start to finish. These teams have been responsible for successfully bringing numerous schemes on board.
The project will be overseen by a programme manager and managed in line with a six-stage process, following the benchmark PRINCE2 methodology. The programme manager will liaise with all internal and external stakeholders and oversee dedicated specialists within the project, such as the asset transition team.
Mercer’s approach to responsible investment
The United Nations Principles for Responsible Investment define responsible investment as a strategy and practice to incorporate environmental, social and governance (ESG) factors in investment decisions and active ownership.
At Mercer we believe that a sustainable investment approach is more likely to create and preserve capital value for long-term investors. In particular, we believe that climate change poses a systemic risk and that, as investors, we should consider the potential financial impacts of the transition to a low carbon economy and the physical impacts of different climate outcomes.
ESG factors are incorporated throughout the Mercer DC Master Trust’s investment arrangement, including Mercer SmartPath™, in line with Mercer’s four-pillar framework.
Consistent with our sustainable investment approach we have committed to a target of net-zero absolute carbon emissions by 20501 for our multi-asset funds and plan to reduce portfolio relative carbon emissions by at least 45% from 2019 baseline levels by 20302. This includes the Mercer Growth Fund used within our default investment option.
1. Defined as absolute carbon emissions, per $1 million of assets under management and Scope 1&2 emissions.
2. Per dollar of assets under management. While the funds continue to maintain an investment objective of seeking long-term growth of capital and income, they also promote environmental characteristics through progressive decarbonisation with a view to achieving net zero emissions by 2050.
Getting started on your DC master trust journey
Employers are increasingly turning to DC master trusts to escape the increasing regulatory burden and to provide members with the expertise and services they need.
This option isn’t for everyone, and there is a great deal of variety between those that are in the market. Here are some questions to get you started:
- Have you got the expertise and resources required to deal with the increased governance and regulatory burden faced by DC pension funds?
- Are you prepared for that burden to increase as ESG requirements and other regulations intensify?
- Are your members getting the investment knowhow and advice and support they need for a smooth path to a comfortable retirement?
The DC master trust:
- How independent is the DC master trust of its manager?
- What is the range of resources available to the DC master trust?
- How much flexibility does the DC master trust have to employ the best providers?
- What services can the DC master trust provide to support your members?
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