The L&G Mastertrust has reached £30bn of assets under management, becoming the first commercial master trust in the UK to pass this milestone.
This exceeds the proposed £25bn minimum size of workplace pension schemes by 2030, set out by the Chancellor Rachel Reeves in her recent Mansion House speech. The Government is currently considering industry responses to these ‘mega fund’ proposals, following a consultation on plans to drive consolidation in the workplace pensions market.
Announcing that it was the first commercial master trust to reach this size, Legal & General said the master trust now has 349 participating employers and is responsible for looking after the retirement savings of 1.9m people in the UK.
Other not-for-profit master trusts, including Nest and The People’s Pension, serve a larger number of members, with Nest exceeding this £30bn minimum last year.
Corporate Adviser’s Master Trust and GPP report shows the bundled assets of all major workplace pension providers, which includes GPP offerings for traditional insurance providers like L&G. On this measure, the most recent Corporate Adviser report shows L&G is the second biggest pension provider, behind Aviva – although these AUM figures are to the end of 2023.
It is not yet clear from the government proposals whether this £30bn limit would apply on a scheme or default level.
L&G’s announcement reflects the exponential growth of workplace pension funds and master trusts in recent years, with many of the largest providers, such as L&G, having seen the fastest rates of growth. Today’s announcement comes less than two years after the L&G Mastertrust hit £20bn in AUM.
L&G says its rapid growth reflects the fact that employers recognise the value, governance, investment capabilities and strong focus on member experience that it provides.
The L&G Mastertrust has evolved under the leadership of Robert Waugh, who became the chair of trustees in 2023. Recently it has developed new investment options for members, including last year’s Lifetime Advantage Funds which include exposure to private markets. It has also launched a sharia DC investment proposition.
Waugh says: “Size is not our objective, but having the economies of scale to deliver what our members need in investment opportunities, sustainable priorities and technical innovation whilst delivering value for money can only be achieved with significant assets.
“Having the largest commercial master trust enables the trustees and Legal and General to strive to lead the market in value for money and member outcomes.”
Legal & General head of defined contribution Rita Butler-Jones adds: “The size of the L&G Mastertrust enables us to deliver economies of scale and a wide range of investment opportunities, underpinned by the robust governance and oversight offered by the board of trustees.
“The L&G DC team are delighted to have reached this milestone and look forward to continuing to work with the trustees, our participating employers and their members as the master trust grows at pace in the years ahead.”
