Putting your defined contribution pension on track

More people are enrolled in UK defined contribution pension scheme and more money is invested in those schemes than ever before. As a trustee or an employer who sponsors a DC pension plan, you face an increasing array of requirements and risks as you try to secure the best outcomes for your members with scarce resources.

In turn, your members need more help. Most DC pension scheme members are not saving enough for retirement and many do not understand the benefits they receive. The rising cost of living is exacerbating financial pressures on members.

Many defined contribution pension schemes have failed to keep up with changes in the industry since auto-enrolment began in 2012 and pension freedoms took effect in 2015.

The complexity of running a DC pension plan means many trustees and sponsors are over whelmed. We are here to put you on track and help you focus on the most important issues and best outcomes for your members.

Read more about our defined contribution services and solutions

Mercer has a full range of services and solutions to help you put your defined contribution pension scheme on track. From expert human insight to proprietary products, we aim to help you reduce risk, increase value and secure better outcomes for your members.

  • Mercer Smart Pension

    Mercer Smart Pension brings together Smart Pension’s technology-led, digital-first master trust and Mercer’s market-leading investment capabilities, governance, and retirement services.

  • Mercer DC Master Trust

    Outsourcing your workplace pension scheme to the Mercer DC Master Trust can deliver cost and time savings for your business and opportunities to improve outcomes for your people.

  • DC consulting

    We help defined contribution (DC) pension schemes improve communication, governance and investment to enhance outcomes for your members, manage risk and build your members’ confidence in their DC pension scheme. As DC consultants we put members first in everything we do.

  • Financial wellbeing

    Employee financial wellbeing is increasingly important for organisations as the cost of living increases. Mercer’s Financial Wellbeing Index helps you understand how you measure up and where you should direct your resources to provide support for your people in a more holistic way.

  • SmartPath

    Mercer SmartPath is a defined contribution investment strategy that helps your pension scheme members cut through complexity to help achieve a retirement outcome that suits their lifestyle and needs.

  • DC MOT

    Our DC MOT is a comprehensive pension audit that checks whether you and your members are getting good value when company and personal finances are under strain.

  • Mercer Money

    Our financial wellbeing app uses open banking technology to give your employees a holistic, near real-time view of their finances. It offers users personalised alerts and insights, and modelling and budget-setting tools to help them manage their money.

  • Retirement Readiness Index (RRI)

    Our Retirement Readiness Index is a DC pension review that puts member outcomes first. RRI conducts a retirement assessment for each member and suggests actions that could put them on track for a comfortable lifestyle when they stop work.

  • Governance

    An effective system of pension trustee governance is at the core of every well-run pension scheme. Ensuring that you have all of the policies and procedures in place to achieve this will lead to better outcomes for your members and give you more time back to focus on your strategic aims.

  • Responsible Investment Total Evaluation (RITE)

    Our Responsible Investment Total Evaluation (RITE) shows how well you are integrating ESG considerations into your decisions – and enables you to take action to improve.

Helping trustees and employers put member outcomes at the heart of their DC pension.

Interlinked issues for employers, trustees and members include:

  • Employers

    • With businesses facing rising costs, you may be getting poor value from your DC pension scheme or paying too much in charges
    • Auto-enrolment processes for many schemes have not kept up with changes, leaving you exposed to financial penalties and reputational risk
    • Does your DC pension arrangement add value to your reward and benefits package, and help with retention and succession planning?

  • Trustees

    • Have you got the time, resource and expertise to deal with the burden of governance requirements and regulation?
    • Do you spend the right amount of time adding value through your oversight vs worrying about compliance?
    • Are you agile and informed enough to get the investment returns needed by your DC plan members in a volatile, complex environment?

  • Members

    • Do your members have access to the support and resources they need to help them make the right choices?
    • Ensuring employees understand their DC pension scheme and associated benefits can increase the perceived value of the DC plan
    • As employees look to their employers for support and advice, you may be able to help them pay less tax through a salary exchange
To deal with these challenges you need a coherent strategy for your DC pension plan. Our teams are here to help you establish and implement a plan that will put you and your members on track.

  • Scheme structure – the range of options available to DC pension schemes has increased as complexity and costs have grown. We can help you choose the right option – from remaining as a single trust or contract-based scheme to joining a DC master trust. Our knowledge and scale can also ensure you get the best value from your provider
  • Investment – we work with you to devise an investment strategy that meets your needs and those of your members using multi-asset portfolios. We build in the latest thinking and requirements on ESG matters to position your members as the market changes
  • Communication and engagement – with personal finances under pressure it is important to support your DC pension scheme members by making them aware of their benefits and helping them achieve the best outcomes. We provide services that help employees understand their options and we measure the impact to make sure your communication is effective
  • Responsible investment – ESG issues have risen up the agenda.  ESG isn’t just about the climate emergency: pressure is building for DC pension schemes to do more on diversity and stewardship. We can make sure you stay ahead of requirements
  • Auto-enrolment – would you pass one of the Pensions Regulator’s spot checks to make sure you are complying with your duties under auto-enrolment? We can help you identify and correct errors that could put you at risk of financial penalties and damage to your reputation
  • Retirement options – pension freedoms mean your members have various options when they come up to retirement. It’s important that they get this right yet few have given much thought to their needs and the choices they have. Scams can cost them dearly. We can support your members to help them make the right choices
  • Retirement adequacy – if members of your DC pension scheme can’t afford to retire they will be unhappy and your reputation will suffer. This scenario also threatens to upset your HR and succession plans by blocking off routes for career progression for the next generation of workers. Our Retirement Readiness Index can help you and your employees set a target and plan towards achieving their goals so they can retire at the right time
  • Tax efficiency – many employers and their staff are paying too much tax. For example, higher rate tax payers often neglect to reclaim tax paid at source on their pension contributions, and salary exchange can be used to reduce National Insurance payments for the employer DC plan members. Careful planning is required and our experts can put the right structures in place
The complexity of running a DC pension scheme means many trustees and sponsors are overwhelmed. We’re here to put you on track.
Gail Philippart

UK DC Consulting Leader

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