Your members’ future in safe hands - the Mercer DC Master Trust

The cost and complexity of managing a DC pension fund are increasing as regulatory and governance requirements increase. At the same time, many scheme members don’t have enough saved for their retirements because they haven’t always had the right help and information to prepare.

Our DC Master Trust helps address these problems by providing:

• access to a wider range of investment choices than may be available as a sole trust.
• digital tools and engaging communications focused on holistic financial planning.
• independent governance by professional trustees.

Our DC Master Trust’s unique open architecture operating model gives participating employers access to best-in-class providers in each of their areas of specialism. Independent trustees are responsible for ongoing governance while you, the employer, keep the ability to decide on contributions.

The United Nations Principles for Responsible Investment define responsible investment as a strategy and practice to incorporate environmental, social and governance (ESG) factors in investment decisions and active ownership.

At Mercer we believe that a sustainable investment approach is more likely to create and preserve capital value for long-term investors. In particular, we believe that climate change poses a systemic risk and that, as investors, we should consider the potential financial impacts of the transition to a low carbon economy and the physical impacts of different climate outcomes.

ESG factors are incorporated throughout the Mercer DC Master Trust’s investment arrangement, including Mercer SmartPath™, in line with Mercer’s four-pillar framework.

Consistent with our sustainable investment approach we have committed to a target of net-zero absolute carbon emissions by 2050¹ for our multi-asset funds and plan to reduce portfolio relative carbon emissions by at least 45% from 2019 baseline levels by 2030². This includes the Mercer Growth Fund used within our default investment option.

1. Defined as absolute carbon emissions, per $1 million of assets under management and Scope 1&2 emissions.

2. Per dollar of assets under management. While the funds continue to maintain an investment objective of seeking long-term growth of capital and income, they also promote environmental characteristics through progressive decarbonisation with a view to achieving net zero emissions by 2050.

Employers are increasingly turning to DC master trusts to escape the increasing regulatory burden and to provide members with the expertise and services they need.

This option isn’t for everyone, and there is a great deal of variety between those that are in the market. Here are some questions to get you started:

Your position:

• Have you got the expertise and resources required to deal with the increased governance and regulatory burden faced by DC pension funds?
• Are you prepared for that burden to increase as ESG requirements and other regulations intensify?
• Are your members getting the investment knowhow and advice and support they need for a smooth path to a comfortable retirement?

The DC master trust:

• How independent is the DC master trust of its manager?
• What is the range of resources available to the DC master trust?
• How much flexibility does the DC master trust have to employ the best providers?
• What services can the DC master trust provide to support your members?