Mercer, a Marsh McLennan business, has reached an agreement to acquire long-term savings specialist Cardano for an undisclosed amount, subject to regulatory approval. As part of the agreement, approximately 550 Cardano colleagues in London, Nottingham and Rotterdam will join Mercer, upon completion of the transaction.

It is easy enough to see how Mercer can use Cardano’s capacity to manage pension risk through fiduciary management using LDI.

It’s harder to see how Mercer, or anyone else for that matter, is going to make a silk purse out of NOW pensions.  NOW has caused the pension industry concern for more than a decade, first through lousy interfaces with employers leading to administrative chaos, latterly by the failure of its idiosyncratic investment policy to deliver decent outcomes to savers.

NOW started out as Danish state – owned pension company, ADP’s rival to Nest.

It offered a single fund , a complicated charging structure, a net pay contribution collection system and administration  outsourced to a succession of third-parties,  payroll interfaces managed by middleware.

It won plaudits by creating a trustee board of high-profile political figures including Nigel Waterson Chris Daykin and Terry Monks. Latterly it has switched chair to Joanne Segars, but the trustees have had to deal with high levels of dis-satisfaction from employers and members.

At one point distressed specialist Dalriada had to be appointed to the board to restore some order.

Most of its early problems related to having little or no control of its administration, it being outsourced. After one failed contract, NOW switched to JLT which was later bought by Mercer

In July 2017, Now had to withdraw from the Master Trust Assurance Framework. Then CEO Morten Nilson said

Largely as a result of NOW: Pensions’ change of third party administrator, it has experienced some delays processing contributions for a small percentage of clients. NOW: Pensions has kept The Pensions Regulator fully updated regarding these historic issues and accept that getting these schemes up to date has taken longer than it should due to the complexity of some of the cases, the poor quality data that was sometimes involved and the systems used.

The Pension Regulator had  put Now in the pension equivalent of special measures.

In November 2023 NOW sacked Mercer and appointed Tata Consultancy Services in its stead. Whether this will  be fully implemented now that Mercer own NOW is one of the intriguing questions left unanswered.

Another is whether Mercer will want to continue running both the Mercer and the NOW mastertrust. They serve different demographics, NOW grew through introductions from incentivised accountants in the early years of auto-enrolment. Mercer has grown by  working with its occupational pension scheme clients who have switched workplace pension to Mercer. Mercer is a consolidator, NOW has grown organically.

In 2021 NOW won its most recent large client, Uber. This despite not having a Sharia fund and Uber having a high proportion of Muslim staff. It turned out that Uber had been introduced by service provider Adecco. NOW has struggled to attract new business.

It has also struggled with small pots, which form the majority of its estimated two million accounts.

It has struggled with its charging structure, which penalised small pots. It has struggled being a net pay provider when its two principal rivals People’s Pension and Nest operated relief at source. A very high number of NOW’s members are caught by the net pay anomaly and though this is in the process of being resolved, has meant that many low earners have not get value for their money from the tax system

Mercer will now have the responsibility of either integrating its two master trusts or managing the unloved and underwhelming hulk that is NOW pensions.

 

The logos change over time, but not NOW master trust’s fortunes