Mercer has been appointed as the preferred provider on the framework for a defined contribution pension scheme for the UK’s higher and further education sector.

The consultant's master trust offering was chosen as the DC plan of choice following a thorough and competitive EU tender process managed through Advanced Procurement for Universities and Colleges.

The appointment covers over 200 institutions making up the higher and further education sector.

Mercer said the agreement “provides the higher and further education sector with the ability to utilise a pre-tendered and assessed pension plan without the need to conduct separate lengthy and costly procurement processes saving time, effort and costs while avoiding the enrolment of staff into several DC schemes as their careers develop”.

APUC special projects manager Emma Nicholson said the assessors felt “it would offer the sector competitive high quality pension provision, robust independent governance and value for money”.

“The new arrangement has been designed to offer a flexible solution to the sector and staff that are in the scope of the scheme.”

Mercer’s master trust was launched in October 2013 offering clients the choice between providers AEGON, Friends Life, or Zurich.

BESTrustees was chosen to act as independent trustee for the trust.

Mercer said its new offering tackles many of the issues the recent Office of Fair Trading Report raised with the defined contribution market.

The OFT investigation concluded many trust-based DC schemes provided poor value for money in part due to a lack of capability or incentive for employers to seek a good value plan. The complexity of the system also made things hard for employers and savers.

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