PMI Crest
Why are Master Trusts so good at reducing risk?
9 April 2021

Why are Master Trusts so good at reducing risk?

Insight Partner

Defined Contribution (DC) Master Trusts have become the arrangement of choice for many. In previous articles I’ve discussed the strong governance regime that they have in place and why this is so important. This article considers risks from three different viewpoints and examines why Master Trusts are so effective in reducing them.

What is risk?

The Oxford English Dictionary defines risk as a situation that involves being exposed to danger or the possibility that something bad will happen. Both of these can have severe consequences when it comes to pensions, so reducing them is critical.

The member

A member’s main risk is income adequacy, but it’s not just that. Throughout the journey members have to feel comfortable that their interests are being looked after, any issues are managed (e.g. investment volatility), they are reassured that their money is being looked after and that they are on the right path. The size and scale of Master Trusts means that they are better placed than the majority of schemes to manage these risks. The trustees are experienced professionals who drive value for members and know what to challenge, when, and how, to ensure the best possible outcomes. Not only that, the support structure in place around the trustees adds another layer of governance that many own trusts simply do not have access to.

The majority of Master Trusts operate in a competitive, commercial world and, therefore, they have to continually invest in their proposition. This has the advantage of delivering better communication tools and innovations which help the member understand what their financial future will look like and, where necessary, take action.

The employer

Employers need a pension scheme that enhances (or at the very least not detract from!) the employer brand as a great place to work, minimises reputational risk and reduces costs; all whilst focusing on running a successful business.

Employers running their own scheme and the ‘exposure to danger’ it has for them is no longer a risk that needs to be taken. In

the past there was no real alternative for employers who wanted to do the right thing by their employees and have control - Master Trusts have changed all that.

One of the arguments for keeping the status quo was that Master Trusts cannot be personalised to an employer’s needs. This is not the case anymore. Leading Master Trusts, like Atlas, now offer flexible solutions that can accommodate employers’ specific requirements. The argument for employers to switch to a Master Trust is now more compelling than ever.

The existing trustee

Existing trustees will have worked tirelessly to deliver the best possible outcomes and being told that this responsibility is being taken away and passed to someone else is difficult. However, many trustees are struggling to find the time required to cope with the ever increasing regulatory obligations.

From all the alternatives available to trustees, Master Trusts are undoubtedly the solution that minimises risk. They are handing over the reins to an arrangement that is subject to a stringent authorisation regime from The Pensions Regulator, run by a professional board who only has the members’ best interests in mind, together with tried and tested systems to ensure a smooth transfer of assets. Who better then, to carry on the good work already done and build on the legacy created, than a Master Trust?


Master Trusts really are a winning solution for everyone. Why should they be used? Simply remember RISK - Regulated, Innovative, Scale and Knowledge!

A Master Trust is hard to beat when it comes to reducing being exposed to danger and the possibility that something bad will happen.


This article was featured in Pensions Aspects magazine April 2021 edition.

back to Pensions Aspects Magazine

Last update: 13 April 2021

Anish Rav
Anish Rav
Atlas Master Trust
Head of Client Strategy, Proposition and Strategy

Client Director, Trustee Executive

Salary: £80000 - £130000 pa

Location: Work from home, with travel to client meetings/office as required

Senior DB Pensions Technical Admin., 2-3 days from home

Salary: £25000 - £38000 pa

Location: East Sussex, 2-3 days work from home

Pension Administrator (Hybrid Flexible Working Option)

Salary: £27000 pa

Location: South Yorkshire (with Hybrid Flexible Working Option)

You may also like:

Pensions is boring: what can Master Trusts do about it?
07 June 2021

Pensions is boring: what can Master Trusts do about it?

Some of you may have attended the PMI’s webinar in April where I spoke about whether environmental, social and governance (ESG) factors are the panacea for pension engagement, and considered where we, as an industry, are going wrong on engagement. As can be seen from the graph below, there was a recognition that pensions engagement strategies aren’t very effective, with only 36% of respondents to a live poll on the day believing that their strategy was really effective. From this we can probably tell that there still appears to be a considerable amount of work to do.

Read more