A study by Willis Towers Watson has revealed that two-thirds of employers who run their own defined contribution (DC) trust-based pension are looking to make the change.
Recent data has identified that more employers are now seeking to move to a master trust pension in the next two years.
According to Willis Towers Watson’s annual FTSE 350 DC pension study 2021 which covers 95% of eligible companies in the FTSE 100 and 250 indices, around two-thirds (61%) of employers who run their own defined contribution (DC) trust-based pension are looking to make the change.
The study also revealed that around 12% of employers that already use a master trust are thinking about reviewing their provider within the next couple of years.
Despite the struggles that the pandemic has presented companies, maximum matches contribution levels for FTSE 100 firms have remained stable. In fact, the average contribution rates for employer matching DC schemes continued to sit at over 17%.
However, the study stated that less than a fifth of companies enrol members at a contrition rate in excess of the minimum level that exists within their particular contribution structure.
The study explained: “There may therefore still be work to do in overcoming inertia in decision making so individuals understand and, where possible, take advantage of more valuable contribution rates to improve their own outcomes.”
The results of the survey indicate that financial wellbeing is high on the agenda for organisations.
Across the FTSE 350, incorporating the DC pension scheme into a broader financial wellbeing strategy is a top-three priority for a business’ benefits provision.
Willis Towers Watson’s data revealed that of the organisations who have moved to a master trust appear much more likely to focus on improving employee financial wellbeing by incorporating pensions into benefit programmes.
For example, 47% of those with master trusts say this is their focus against 30% of those with trust-based schemes.