Case study

Constructing a 'one size fits all' DC scheme solution

Pensions & benefits

How we helped our client establish a future-proofed 'One Size Fits All' DC Scheme solution.

The background

Our client wanted to overhaul their existing DC provision and asked us to support them through the process. Running two DC Schemes had become unmanageable, expensive and confusing for members. The existing Schemes had different charging structures, administrators and investment options. It was clear that this was not matching our clients’ needs or the needs’ of members. The increased governance imposed on Trustees had become an additional burden for the employer.

Our solution

  • We talked our client through their options to find a potential solution including transferring the Trusteeship from the employer.
  • We took into account what would make the scheme a success from an employer point of view (i.e. less administrative and governance headaches) and what additional objectives would make the scheme successful for members (i.e. lower charges and less confusing investment options).
  • We considered if they should purchase an “off the shelf” insured based arrangement as the right solution for the future, or should they consider switching to a Multi-Employer Scheme. (Master Trust)
  • We were able to comment on the merits and drawbacks of each approach and then recommend the best solution.
  • Our solution was a Multi-Employer DC Scheme (Master Trust) to capture the objectives of both the employer and member.
  • A member presentation was held to roll out the new solution to help members understand the new DC Scheme and provide them with the opportunity to ask questions.

The results

Keeping costs down

Under the Multi-Employer model the employer shares fixed costs with other employers and combined purchasing power to keep costs down for members.

Maintaining control over important elements

The employer maintains full control over the elements that matter, including the contribution rate, retirement age and face-to-face member engagement.

Reduced investment options for members

Investment options are limited to 6-7 options so members are not overwhelmed with too much choice.

Independent trusteeship

An independent professional trustee oversees this scheme providing comfort to members and removing the governance burden from the employer.

Given my experience of LCP, I would have no hesitation in recommending their pension consultancy services to others.

LCP Client