Veolia moves DC scheme to master trust
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French waste management company Veolia is moving its UK defined contribution scheme to a master trust from the start of June, as consolidation of DC schemes continues apace.
A number of employers have already chosen to move their single-trust DC pension schemes to multi-employer trusts to reduce the governance burden on the sponsor, and more are expected to do so. Last year, Thames Water moved its scheme to the Aon Master Trust, while Telefonica chose Legal & General and Vodafone transferred its £1.4bn DC scheme to LifeSight.
Transition set to lower charges for most
LifeSight, Willis Towers Watson's offering, has now also picked up the Veolia UK Pension Plan. The scheme’s members will start paying their contributions into the master trust from 1 June. Existing funds will be moved in July, and the transition is expected to be complete at the end of August.
The scheme previously used Scottish Widows for its DC investments, having been transitioned there after Zurich sold its UK corporate savings business to Scottish Widows in 2019. In the same year, the trustees negotiated the removal of a historic arrangement with Mercer Workplace Savings which meant that fees were reduced from 1 January 2020. With the transition to LifeSight, the trustees have said that charges will again be lower for about 90% of members.
Investment funds will be different
The investments in the master trust will not be the same as those members are currently holding, and existing investments “will be mapped into the closest matching funds under LifeSight”, the trustees said.
Currently the scheme’s default strategy is a lifestyle option investing 25% in diversified drowth funds, 37.5% in global equities and 37.5% in multi-factor equities in the growth phase, gradually switching to 60% DGFs, 5% global equities, 5% multi-factor equities and 30% corporate bonds 10 years before the retirement date, and then after five years again transitioning to 60% DGFs, 15% corporate bonds and 25% cash.
