Abrdn has announced that it will launch a defined benefit (DB) master trust in Q2 2022, in partnership with XPS Pensions Group.

The asset manager and consultancy firm have formed a “strategic alliance” to develop and launch the DB master trust.

The firms stated that the scheme will use Abrdn’s ‘expertise and scale’ and XPS’s ‘high-quality service delivery’ to help small- and medium-sized schemes set their pensions strategies and deliver it in the master trust model.

XPS will provide the actuarial and investment consulting, administration, secretarial, and covenant services to the scheme.

The DB master trust will aim to provide cost savings, governance improvements and the opportunity to improve the security of member benefits.

Environmental, social and governance (ESG) considerations will be embedded into investment decisions, alongside an integrated risk management approach.

The companies noted that there were still over 4,000 small- to medium-sized DB schemes with combined assets of nearly £200bn.

Commenting on the announcement, Abrdn CEO, Stephen Bird, said: “As Abrdn continues to focus on delivering solutions for clients, I am delighted that we will be launching a UK DB master trust.

“The Abrdn pensions master trust has been designed with XPS Pensions Group to harness the relevant expertise of both firms and offer a solution that provides a professional governance model, high-quality pensions consultancy and administration services, material expense savings through economies of scale and access to a broad range of Abrdn’s relevant investment strategies.”

XPS co-CEO, Paul Cuff, added: “We are delighted to partner with Abrdn in the development of an exciting new DB master trust.

“This new solution should really help bring governance and efficiency improvements to the benefit of thousands of pension scheme members. We have worked hard with Abrdn to develop integrated funding and investment solutions that pass on the combined benefit of their investment management expertise and our investment, actuarial and administration expertise.

“This master trust gives smaller schemes access to the same opportunities that much larger schemes enjoy and gives peace of mind to corporate sponsors allowing them to dedicate more time to running their business.”

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