Mercer’s new master trust offering in partnership with Smart Pension (Smart) blends quality investment, manager selection, technology, and financial advice to create a unique offering for UK businesses.
It’s time to rethink retirement savings.
A pension is about much more than a pot of money for later life. It’s about financial security, long-term planning, and personal wellbeing – in other words, building a better future for pension savers.
We believe that a modern pension plan should be able to offer all these things – and more. Businesses of all sizes should be able to offer tools to support employees’ financial wellbeing in order to help them make good decisions about their future.
“Progressive employers have long realised that pension provision is more than just a legal obligation,” says Stephen Coates, Head of Proposition at Mercer Workplace Savings. “Quality pension arrangements can attract and retain talent.
“But, as the workforce ages, employers will find it incumbent upon themselves to nurture the financial health and resilience of their workforce to support later retirement ages and phased retirement. The next generation of workplace pensions will need to be equipped to help employers do this successfully.’
However, for many businesses, affordability is a serious issue when it comes to pension provision and related employee benefits. Most auto-enrolment master trusts are limited in the choices, guidance, and help they give to savers.
This is particularly important when it comes to options at retirement. Those master trusts with more options, features, and support are often more expensive and so are usually only available to the largest employers.
We believe that all pension savers should be able to access the tools they need to make the right choices with their retirement pots. We believe that pot size should not be a barrier to high-quality customer service. We believe that ‘premium’ features should be available to all.
We believe it is time for change.
Introducing: Mercer Smart Pension Mercer has teamed up with financial technology company Smart Pension to create Mercer Smart Pension.
This unique offering combines Smart’s innovative and user-friendly technology with Mercer’s leading investment selection and retirement planning expertise to create a high-quality pension solution for employers.
Mercer Smart Pension is competitively priced, giving your employees access to institutional-quality investment and pension services at the same time. There are no hidden or confusing fees.
Crucially, Mercer Smart Pension also includes a digital regulated financial advice service to help savers make the best choices for their retirement.
By blending our premium-level services with cutting-edge technology, we can offer businesses of all sizes access to quality, scalable, and affordable retirement saving and planning services.
“This is a game changer for pension provision,” says Tom Curtis, Master Trust Strategy Leader at Mercer. “By combining Mercer’s leading institutional-quality investment expertise with Smart’s technology, we’re creating a strong value proposition for employers.
“Mercer Smart Pension is a one-stop shop for high-quality investments, a user-friendly and efficient interface, and – uniquely – a fully-regulated digital retirement advice service to support employees through their most important financial decisions.”
Building a strong pension offering
We believe there are some key ‘building blocks’ that a high-quality pension fund should have.
1. A diversified investment strategy
Fund selection and strategy design is a key element of the value proposition for Mercer Smart Pension.
Users benefit from our extensive global investment research and manager selection resources, with which our in-house team operates a best-in-class investment strategy. Known as Mercer SmartPath, this approach is already employed by our existing master trust and used by some of our largest pension clients.
2. Value for money
Access to a high-quality pension fund does not come for free – but it doesn’t need to cost the earth either. Mercer Smart Pension combines Mercer’s institutional grade services with Smart’s flexible technology platform to create a scalable offering at a price that is affordable for employers and employees alike.
Mercer Smart Pension costs 30 basis points per year, regardless of the number of employees or size of their savings, and inclusive of all features – including our digital advice service.
3. Top-quality customer service
Pension saving is often seen as complex and difficult to understand – but it doesn’t have to be this way. We take great pride in our customer service and providing clear communications to ensure your employees understand their financial situation and can act accordingly.
For employers, Mercer Smart Pension’s digital platform makes on-boarding simple and fast, getting you compliant with auto-enrolment rules quickly and reducing the administrative burden for finance and accounting staff.
4. An engaging communication plan
Long-term planning is not an easy concept for many people to come to terms with. That’s why we have worked hard to develop a clear, concise, and engaging communications strategy to help savers understand their pension.
5. Financial advice
We believe that, to truly stand out as a top-quality retirement service and not just a savings pot, your pension fund should be able to help members make the important financial decisions they need to retire comfortably.
Through our innovative digital retirement advice service, we have created a way of ensuring that all Mercer Smart Pension users can get the advice they need at an affordable cost.
Making good retirement decisions
We firmly believe that providing easy, seamless access to financial advice will help people make better decisions about their retirement savings than if we just offer generic guidance and information.
This is why we have placed accessible advice for all members at the heart of Mercer Smart Pension.
Retirement is the single most important financial decision most people will make. There are several options available to most savers for how they can draw their pension and many different service providers to choose from, but not all will be suitable. Making that choice can be difficult and often overwhelming.
Our digital advice offering allows us to ‘democratise’ advice, making it affordable for all pension savers. By using cutting-edge technology, we can ensure savers get the benefit of advice tailored to them regardless of the size of their pension pot.
“Advice is traditionally seen as only for those who are ‘high net worth’,” says Rishal Singh, Master Trust Client Delivery & Engagement Lead at Mercer. “By making it digital, we are bringing advice to the masses and taking away the fear around whether a person has enough money to receive advice. By making it digital, we’re making it more accessible.”
Giving your employees security about their financial future can form an important part of their overall wellbeing. Providing support has been proven to improve employee job satisfaction and talent retention.
This is just part of the financial wellbeing story, however.
Supporting your employees’ future
Mercer Smart Pension represents a change in mindset for employers when it comes to pension provision.
As Stephen Coates explains: “To look after members, you need to look at their situation holistically and you therefore need the tools to look after them holistically. It’s not just about managing a pot of money in a scheme.”
Money worries are one of the biggest causes of stress for individual employees and can have a serious impact on their ability to perform their jobs effectively.
That’s why our digital retirement advice offering looks across all pensions an employee has and can incorporate other savings pots and assets. We help people bring in other pensions and assets such as ISAs and property so then can look at things in the round.
Our digital advice service helps savers to address the four ‘pillars’ of financial wellbeing to get their money in shape and reduce finance-related stress.
The four pillars of financial wellbeing
Control over the day-to-day | Prepared for the unexpected | Freedom to make choices in life | On track for the future |
Not overspending income. Debt and expenses are manageable. | Having the capacity to absorb a financial shock. | Including access to resources or financial guidance to improve your situation. | Having a plan for the future and saving towards it. |
Many of our existing clients across our pension and employee benefits businesses are keen to offer their employees perks and services such as wellbeing support or healthcare. But as Stephen Coates points out, this isn’t just about looking after your employees now – it’s an approach that should be looking well into the future.
“By 2040, 47% of the workforce will be over the age of 50,” he explains. “The workforce is getting older and will have different needs – they will want more autonomy; they will want more flexibility. It will be, in part, the job of the employer to help look after them financially.”
With these changing needs, employees will look to use their pension savings more flexibly through options such as drawdown or phased retirement. “There will be a lot more onus on employers to help look after these people and transition them out of work over a much longer period,” Coates continues.
Mercer Smart Pension is designed to make providing a pension for your employees straightforward and affordable. Contact us today to find out how we can help you and your employees towards a more secure financial future.
Issued in the United Kingdom by Mercer Limited which is authorised and regulated by the Financial Conduct Authority. Registered in England No. 984275. Registered Office: 1 Tower Place West, London, EC3R 5BU.
For further information, please contact Ben Claxton via email at ben.claxton@mercer.com or visit www.mercer.com
