From thought leadership to technical pieces, knowledge hub keeps our members and pensions professionals up to date with the recent developments in the industry.
Governance – what can we learn from Master Trusts?
Since the modern day Master Trust was first established in 2012, they have become a phenomenon and are now amongst the most popular form of Defined Contribution (DC) Pensions Savings. One of the key factors to their success has been the governance structure underpinning them. From The Pension Regulator’s authorisation and supervision regime, to the efficient operation of the Board, Master Trusts have proved that strong governance does lead to better outcomes. This article explores the key learnings from Master Trusts and whether these principles can be applied to other pension schemes.
Accessing alternative assets to build diverse portfolios
Assets under management in private markets have grown exponentially in recent years, hitting $4.74 trillion by the end of 2020*, and growth is set to continue on this trajectory**. It is a growing universe, but one which is out of reach for most investors, as assets are generally held in long-dated funds with no redemption rights and large minimum investment limits.
Any path to recovery is beset with challenges, something exemplified by financial markets’ performance so far this year. The first six months of 2021 saw swings in asset prices, sentiment and optimism as the global economy continued its quest for a much-needed recovery. Some say we are hitting an inflection point with growth, inflation and policy stimulus potentially peaking, but uncertainty remains high.
Accessing future cash flow to understand the journey plan
Ultimately, future cash flows of the sponsor pay pension contributions. A largely historical approach to covenant assessment, focused on past performance and the balance sheet, can misjudge the level of covenant support available or even misrepresent the risks that a scheme faces. A forward-looking approach is an essential part of a robust covenant assessment framework.
Accessing alternative assets to build diverse portfolios
Assets under management in private markets have grown exponentially in recent years, hitting $4.74 trillion by the end of 2020*, and growth is set to continue on this trajectory**. It is a growing universe, but one which is out of reach for most investors, as assets are generally held in long-dated funds with no redemption rights and large minimum investment limits.
Any path to recovery is beset with challenges, something exemplified by financial markets’ performance so far this year. The first six months of 2021 saw swings in asset prices, sentiment and optimism as the global economy continued its quest for a much-needed recovery. Some say we are hitting an inflection point with growth, inflation and policy stimulus potentially peaking, but uncertainty remains high.
Accessing future cash flow to understand the journey plan
Ultimately, future cash flows of the sponsor pay pension contributions. A largely historical approach to covenant assessment, focused on past performance and the balance sheet, can misjudge the level of covenant support available or even misrepresent the risks that a scheme faces. A forward-looking approach is an essential part of a robust covenant assessment framework.
Governance – what can we learn from Master Trusts?
Since the modern day Master Trust was first established in 2012, they have become a phenomenon and are now amongst the most popular form of Defined Contribution (DC) Pensions Savings. One of the key factors to their success has been the governance structure underpinning them. From The Pension Regulator’s authorisation and supervision regime, to the efficient operation of the Board, Master Trusts have proved that strong governance does lead to better outcomes. This article explores the key learnings from Master Trusts and whether these principles can be applied to other pension schemes.
