Case study: Marks and Spencer buys into master trust

Marks and Spencer appointed Legal and General to run a master trust arrangement which was set up in August last year to help the retailer comply with auto-enrolment.

Finding a default fund to work across a workforce of 75,000 was a challenge, but Julie Parker-Welch, reward manager, pensions at M&S, is confident in the asset allocation strategy.”The outcome of decisions will only be evident in the future but we believe this default strategy will meet our workforce needs,” she says.

Asset allocation decisions are taken by the master trust’s independent trustees based on guidance from the firm’s governance committee, which, in turn, uses external advisers.

The scheme offers members12 fund choices, from which they can select from a range of low-, medium- and high-risk funds, or invest in the default option, which includes two lifestyle funds based on target retirement dates.

Parker-Welch says that although the trust arrangement did not affect how asset allocations were made, it made it easier to communicate investments to members.

“Investments are a particularly difficult area to communicate effectively, but a trust scheme allows much greater flexibility in the way we explain things to members,” she says.

Marks and Spencer will continue to review the investment strategies and default fund choices as part of its regular DC governance process.

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