Master trusts like ours have had a real opportunity to engage millions of workers who simply aren’t thinking about how they’re going to fund their retirement. Many are bewildered by the concept of pensions or feel that saving for retirement is not one of their financial priorities.
As one of the first master trusts to receive authorisation from the Pensions Regulator (March 2019), the Legal & General WorkSave Mastertrust was introduced to reach as many people as possible with modern pension provision to help steer them away from drifting into uncertain financial futures.
Today, the fact that our Mastertrust has more than £12 billion assets under management1 and been taken up by 180 employers for
1.2 million members, evidences the need for market consolidation of pension provision and demonstrates faith in our trustees’ ability to provide excellent oversight on behalf of employers.
A guiding principle of our approach to our Mastertrust is the importance of member engagement. It’s only by listening to members’ views that we can tap into their concerns and address them in a language they can relate to, on platforms they’re comfortable using.
Many members don’t take active decisions in relation to their savings, for example where their money is invested. The trustees take seriously the decisions they make on members’ behalves and the opportunity for direct member engagement helps validate their assumptions on what is, or is not, important to members.
Caring about issues our members care about
When something is personally relevant to someone, they’re more likely to engage with it – and many of our employers and members care about issues that affect the environment, society and the way organisations are governed. Research by Legal & General last year supports the view that these environmental, social and governance (ESG) issues could be the ‘silver bullet’ to engage members with pensions.
In 2020, the Mastertrust trustees’ updated their stance on ESG issues in their Statement of Investment Principles stating that in the long term, they believe that investments which take into account a range of ESG factors may outperform those that don’t. They also backed the significant expansion of Legal & General’s Climate Impact Pledge in 2020 which assesses more than 1,000 of the world’s companies on their climate change credentials and holds them to account.
As a business, Legal & General and the Mastertrust trustees are both committed to achieving net zero carbon across all our default funds by 2050 or sooner and recently published some ambitious targets to support this aim.
In terms of seeking to understand and give a voice to members’ views on ESG, in 2020 Legal & General collaborated with investment transparency technology provider Tumelo. The Tumelo platform gives members greater transparency about the companies they are invested in and allows them to express opinions about their investments to their fund managers. In addition to informing Legal & General’s investment stewardship team on members views, this feedback supports the Mastertrust trustees’ knowledge of what matters to members and enriches the data on which we base the design of more relevant new products and services.
As for our choice of funds, while all our defaults take account of ESG to varying extents, our Mastertrust now also includes the option of the Future World Multi-Asset Fund for employers who wish to offer their members a default arrangement with an even more positive ESG stance.
In 2020, our biggest engagement coup for both ESG issues and for generally encouraging members to think about their pensions, was attracting record numbers to our first ever virtual member forum in October. At the event, which the trustees jointly hosted with Legal & General’s Independent Governance Committee, world-famous film director, Richard Curtis, spoke about his campaign group, Make My Money Matter, which seeks to drive members to enact change through their pension savings. The group also encourages the industry to invest the trillions of pounds in UK pensions to build a better future.
Called ‘Pensions Actually!’ the virtual aspect of the forum was driven by the pandemic. But the combination of Richard Curtis’ appeal and an accessible platform, resulted in record 3,000 viewings by members and generated hundreds of responses from engaged attendees.
The feedback gave us valuable insights into members’ motivations and re-iterated the trustees’ belief that a range of funds needs to
be available to accommodate our members’ diverse views as there simply isn’t a blanket agreement on ESG that covers everyone.
For instance, the percentage of those relaxed about continued investment in fossil fuels was the same as for those who were vehemently against it (16%) while the remainder were comfortable either way as long as Legal & General was making informed investment decisions which balanced all relevant factors.
This finding further supports a review by the trustees of the default funds which members will be saving into should they not state an alternate for their pension savings. This is a key focus for the trustees given that some 95% of scheme members are currently in a default. It also supports the trustees’ review of wider fund ranges that members can select if they wish to invest in an alternative that more closely aligns with their beliefs.
To help members understand the interplay between investment returns and environmental and societal imperatives, we have a straightforward ESG page on our Mastertrust website which links to Legal & General’s member-friendly ESG Hub.
Listening, learning and acting
Member insight is important to us and we’re always looking to increase the opportunities for members’ voices to be heard so their views develop the Mastertrust in ways that provide most value to them.
For example, we engage with members using interactive webinars and, through Legal & General, we also use virtual reality to
demonstrate the planning tools and website information available to them. In just eight months last year Legal & General doubled the number of members reached via presentations to around 10,000 with subjects including scheme refreshes, financial wellbeing, redundancy, high earner issues and pre-retirement.
As part of assessing whether members receive value for money from our scheme, we regularly conduct surveys to measure the quality of member services and give us a clearer idea of what matters most to members so we can act on it – such as providing easier access to information.
Therefore, one of the ways we’ve tried to make life a little easier for members is through developments in digital self-service options. Last year, despite the pandemic, significant enhancements to our secure pensions portal ‘Manage Your Account’ included adding a new virtual assistant and messaging function so members can receive rapid and targeted online support.
We’ve also seen the take-up of the new app which allows members to access information about their pensions via their chosen digital device. The app easily links to any website that’s
optimised for mobile screens, including HR systems and employee discount schemes. Having a suite of tasks available via one digital platform helps our clients to encourage their scheme members to be more proactive in their retirement planning.
Meanwhile, tied in with effective retirement planning is recognising that we also make sure we provide choice and flexibility in how members take their pension when the time comes.
And finally…
Thanks to our responsive communications and initiatives, our Mastertrust is thriving – even despite the uncertainties brought by COVID-
19. In fact, the lessons we learned in 2020 about adopting more flexible platforms to encourage greater interaction between us and our members means the level of engagement has never been so high.
We’re seizing this momentum by expanding the channels we use to give members a say in the services we provide, so we can keep developing our Mastertrust to help members plan for a better future.