As part of some work for one of our intermediaries, I’ve been asked to make sense of the smaller master trusts and give a view on which of them are likely to be around in their current form in the years to come.
This blog is a work in progress, if you have market information you can send me, please do, if I have made a mistake, please correct it by emailing me at firstname.lastname@example.org
Three aggregators emerging
My view is that there are three aggregators emerging which have sustainable business models
Blue Sky Pension Scheme
Carey Pension Trust
I will explain why and how I think they will achieve scale.
Blue Sky is partially owned by Unite the Union and partly by JIB. It has strong roots and a sound management. It has an independent board of trustees chaired by Tony Filbin. Tony has just become Chair of Capital Cranfield Pension Trustees. As well as the Blue Sky Pension Scheme, it offers a number of smaller propositions all using the Corporate Pension Trust, the Blue Sky administrative platform and a range of target dated funds established by Alliance Bernstein and managed on the Architas Investment Platform.
The smaller propositions all share the same scheme managed by Corporate Pensions Trust (00805962RF) and are…
Fairstone Pension Trust
which are effectively satellite schemes to
which is effectively a satellite scheme to
Lighthouse Pension Trust
The Corporate Pension Trustees are Bridge Street, 100% owned by Eversheds (the law firm)
All the funds invested in all these propositions seem to revert to the investment consultancy of Elston Consulting and the investment itself is made through the Birthstar Funds, a variant of the Alliance Bernstein Target Date Funds which sit on the Architas platform (currently) owned by Axa (but up for sale).
Why we need so many propositions I don’t know. My sources suggest that they will all merge and that Blue Sky will continue to trade as the Blue Sky Pension Scheme and offer services to the Corporate Pensions Trust and its variants
There appear to be two rival groups to BlueSky
Carey Pensions was set up by Carey Olsen, the Channel Island law and is a diversified financial services provider with what appears to be a sustainable business model.
The Carey Pension Trustees don’t give much away about themselves but we know that their first directors were Christine Hallett and Gordon Parkes. Pitmans act as Chair of the Trustees.
Carey Pensions also has a number of variants . The Carey Pension Trustees offer The Carey Workplace Pension Trust (0078745ORX) .
They also offer a similar service to the (Bluesky) Corporate Pensions Trust to a number of smaller schemes. Unlike the Corporate Pension Trust variants, these aren’t administered under the same scheme number so each is a separate legal entity
The smaller schemes that Carey administers are
The Islamic Pension Trust– the HMRC ref no is 00810588RQ – this is a Sharia orientated master trust overseen by Alrayan Bank
Amber Pension Trust (using Blackrock TDFs with a management overlay by Tatton Investment management) 00806524rx
There appears to be a satellite of Amber known as Simplicity Pension run by AVN Wealth Managers. We think this sits beside Amber like the satellite schemes to Lighthouse within Corporate P
Family Asset Pension Trust – promoted by Forth Communications and invested by Quilter Cheviot 00813620RD
AGL Master Trust . AGl is an advisory firm in Scotland with close ties to ICAS and the Law Society. (HMRC number currently unknown)
The Company Pension Scheme (run by the Smarter Web Company and Corporate Pensions Ltd) 00787450RX.
Carey Pensions are also administrates the Close Brothers master trust – also known as YourWorkplacePension (which is now JLT owned).
There are other routes to market for Carey, they include the Brooks Macdonald white-label of the Carey Workplace Pension Trust and un-named others. These serve an important role in giving confidence to advisers and clients that there is an endorsed alternative to NEST.
I’m told that Carey in total administers over 50,000 auto-enrolment accounts , so they appear to be at or approaching “scale”.
There is one further aggregator- Smart Pensions
Smart Pensions also trades under Auto-enrolment UK which is the name of its website
Smart Pensions is managing GenLife (formerly Friendly Pensions) and is openly looking to absorb further business. We understand that the intention is for GenLife and to ultimately be absorbed into Smart (which would make sense).
Both Smart and GenLife share Capital Cranfield as its chair of trustees.
Smart is investing heavily in marketing and has recently taken on personnel from Trust Pensions (now merged with Lighthouse) and from GenLife.
We were uncomfortable with the initial investment governance at Smart and are pleased to hear that this is currently under review.
In our opinion, Smart has a credible business model and is likely to prosper through 2016 and beyond.
The kings of the jungle among the consolidators
There seems to be a fluid group of people who inhabit this space, including Christine Hallett and Paul Bannister and Andrew Evans, the respective CEOs of Carey, BlueSky and Smart Pensions.
Henry Cobbe seems to have feet in many camps as investment organiser and consultant .
Griselda Williams(Smart) ,Will Wynne(Smart) and Graham Peacock(Carey) -are the principal salespeople.
The rest of the small ones
Of course there are a large number of master trusts behind these three consolidators
Salvusis about to consolidate its variant – the Spinnaker master trust- this is owned by Goddard Perry – the pensions consultancy; Salvus offers a white-labelled variant through the IFA Wren Sterling.
National Pension Trust
This is owned by Xafinity – the pensions consultancy and invests in Zurich Funds.
Since publishing this blog, National Pension Trust has been in touch to remind me of its high opinion of itself.
… the following points should be of most relevance:
We have the AAF 02/07 independent accreditation
It is PQM ready
It has a five year plus track record, having been established in 2009
Combining all these four points puts us in a universe of one, from over 100 possibles. The Trustees are Ian Davies (Eversheds), Michael Brown (Portsoken Consultancy and former Head of Compliance at JLT) and HR Trustees.
Thanks for that- National Pension Trust! If you could just submit this wondrous scheme to due diligence, Pension PlayPen would be delighted to confirm the veracity of this claim!
Creative Pension Trust
This is owned by Creative Benefits – the pensions consultancy and invests in Scottish Widows funds
Smarter Pensions (Pension Trust)
Not to be confused with Smart Pensions, Smarter is owned by the Pension Trusts and (we understand) may be marketing itself under that banner – which might be “smarter” as it is only open to charities, not for profits and social housing groups.
I have written about on these pages – a stand alone proposition – this invests in Legal and General funds
A small East Anglian based master-trust with strong links to certain payroll bureaux.
Supertrust is run by enthusiasts Malcolm Delahaye and Dennis Kemp-theirs is a stand alone proposition – it invests in a variety of funds and exclusively offers the Dimensional Managed DC concept
Corpad (Peak Master Trust)
this is owned by Corpad- the pensions consultancy). This is white labelled as the Peak Master Trust. We know little about this pension.
(please note- this section is likely to grow over time as I include more master trusts). A fuller list of master trusts is available from Professional Pensions (without analysis). This list is also available at the bottom of this article.
Consolidators or consolidated?
All of the above have the capacity to absorb or be absorbed either into each other or into the larger master trusts, NOW, People’s and even NEST.
The insurers seem more or less to given up mass-marketing their master trust products – though most of them have one and some of them are very large).
A note on accreditation
Almost all small master trusts are looking for some form of accreditation. This can be achieved either through the use of online platforms (principally Defaqto, Pension PlayPen, F&TRC and Husky) or through the attainment of a professional mark. The most important of these marks is the Mastertrust assurance framework (administered by the ICAEW and promoted by the Pensions Regulator. Other marks include the Pension Quality Mark and variants.
The costs to providers vary from those that are free to use (Pension PlayPen) through those you pay to be rated (DeFaqto) through to the substantial cost (and kudos) of the Mastertrust Assurance Framework (MAF).
The cost of accreditation appears to be driving consolidation and we would expect each of the consolidators to be accredited only once. Whether the small independent firms will continue to trade without the MAF is unlikely. We know of a number of the smaller firms who have either applied for MAF and are awaiting accreditation or are considering doing so.
So what should you do?
If you are an intermediary or a small employer looking at one of these propositions, you need to do due diligence. You are choosing not to invest with the big schemes and you must have a clear reason why.
The risk you run is the risk that you are not investing staff money with an outfit that has a sustainable business plan and that it won’t be around to pay out. What might happen it your provider decides to call it a day? It can either consolidate or go bust.
Is consolidation damaging to member outcomes? I don’t think it is. There is no reason why a small tributary should not enter the sea as part of a mighty river and not lose in the process. Frankly it does not really matter whether your tributary has the same name as the estuary so long as you get to the ocean in good shape.
Where the danger is , is in a master trust suffering from malfeasance and going bust, jeopardising its investments and its member’s outcomes. In my opinion, the consolidation of master trusts is a good thing in that it whips in the stragglers and reduces the risk of calamity.
There may be more risk in investing in an outlier which intends to go it alone and we would strongly suggest that any intermediary or employer looking to recommend or participate in a small master trust has a clear idea of the company it keeps or its business plan to stay solo.
The full list – courtesy of Professional Pensions
Note- those marked in bold are not currently being offered to SMEs for auto-enrolment (as far as we know).
The Amber Pension Trust
The Aon MasterTrust
Atlas Master Trust (Capita Employee Benefits) +
Autoenrolment.co.uk (see note)
The Beaufort Consulting Master Trust
The BBS MasterPlan
The BlackRock Master Trust
BlueSky Pension Scheme +
The Carey Workplace Pension Trust
The Cheviot Trust
Citrus Pension Plan
The Company Pension Scheme (Carey Pensions)
Creative Pension Trust (Creative Auto Enrolment)
Fairstone Pensions Trust (TRUST|Pensions)
Family Asset Protection Company (Carey Pensions)
The Federated Pension Plan
The Federated Retirement Savings Plan
Fidelity Master Trust
Friendly Pensions Mastertrust (see note)
The Friends Life Master Trust
Genlife (see note) (now sponsored by Smart Pension)
GPC Auto Enrolment Master Trust
Islamic Pension Trust (Carey Pensions)
The Legal & General Mastertrust (WorkSave Pension Mastertrust)+
LifeSight (Towers Watson)^+
The Lighthouse Pensions Trust
Little Blue (Lorica)
Mercer Master Trust
Moore Stephens Pensions Master Trust
The NAEA ARLA Master Trust (The National Association of Estate Agents)
National Employment Savings Trust (NEST)*+
National Pension Trust (Xafinity Consulting)*+
PFP Group Master Trust
The People’s Pension (B&CE)*+
The Pensions Trust+ (Smarter Pensions)
Pensions Umbrella Trust (Dean Wetton Advisory)
The Plumbing and Mechanical Services (UK) Industry Pension Scheme
The Premier DB Solution (Premier Pensions Management)
The Premier Life Master Trust (Premier Pensions Management)
The Premier Retirement Saver (Premier Pensions Management)
The Prudential Platinum scheme
Railways Pension Scheme Industry Wide Defined Contribution Section+
Salvus Master Trust (Goddard Perry Consulting)
SEI Master Trust^
Smart Pension Master Trust (See name)
Standard Life Master Trust
The Spinnaker Master Trust (Goddard Perry Consulting)
Strawberry Workplace Pension (TRUST|Pensions)
Workers Pension Trust
YourWorkplacePension (Close Brothers Asset Management)
Zurich Master Trust (Zurich)