Helen Dowsey, director of business development and account management at NEST, speaks to Financial Director about the the challenges and opportunities ahead for master trusts in the UK, in addition to NEST’s key areas of focus over the coming months.
For NEST, the focus will be on three key areas: member strategy – assessing membership in detail and testing mechanisms for communicating with those members, building the member strategy based on the results; at retirement – looking at member journey at the point of retirement and post-retirement; and investment innovation – the master trust is looking to diversify further into illiquid assets.
With regard to opportunities in the pension sphere, employers are increasingly looking to outsource pension management given increased governance and time obligations, or might be looking to consolidate legacy arrangement into one, generating opportunities for master trusts. There are also further opportunities for master trusts with members looking to consolidate multiple pension pots into one.
In terms of challenges for the pension industry, with the phasing stage of auto-enrolment about to begin, it is currently not know how this will impact opt-out rates, yet research has suggested that members will continue to make contributions. Another threat is that of macro-economics, as falls in equity markets or increases in unemployment would create challenges for the pension sector.