What does ‘pension consolidation’ mean?

Consolidation is about assessing if your current DC pension provision is offering the best prospects for your members and, if not, deciding whether you should transfer their assets into a different scheme which might offer better outcomes.

The consolidation rules and what to think about

From 31 December 2021, new regulations came into force requiring DC schemes with assets worth under £100 million to carry out extended value for money assessments and publicly report back in their trustee chair’s annual report on whether their members might be better off in a different scheme.

Meanwhile, from 1 October 2021, increased investment reporting requirements were introduced for all schemes.

We're here to support you with these new requirements, but if you decide you'd prefer to move straight into a master trust, you can do that too. Removing the need to carry out annual value for money assessments.

We’ve put together a four-step checklist with useful tips and guidelines to help you understand the new reporting requirements and your obligations around consolidating pensions. To download our guide, follow the link:

Download our four-step guide to the new pension consolidation rules

Key stages of complying with the requirements

  1. 1

    Conduct a value for money assessment

    DC scheme trustees must assess how their scheme delivers value for members. The results of the assessment must be reported in the annual chair of trustees’ statement and include consideration of costs and charges, fund performance and other measures of governance and administration.

  2. 2

    What to make sure your assessment covers

    Trustees will need to assess and report on:

    • Costs and charges compared with those of alternative schemes:
      • To support transparency of charging, our pricing consists of two parts: an annual management charge and a fund management charge 
      • These two elements combined create the total expense ratio payable by members. All of the relevant fund management charges for both the default investment option and Sole Governance range can be found in our fund centre
    • The way net investment returns are reported:
      • The proposed default investment option for our Mastertrust solution would be our L&G Target Date funds. Full net performance information can be found directly from our fund centre
    • Measures of governance and administration. In assessing the standards of administration and governance, features to check include how well the scheme performs in the following areas:
      • Promptness and accuracy of core financial transactions
      • Quality of record-keeping
      • Appropriateness of the default investment strategy
      • Quality of investment governance
      • Level of trustee knowledge, understanding and skills to operate the pension scheme effectively
      • Quality of communication with scheme members
      • Effectiveness of management of conflicts of interest
    • Whether members are receiving value for money, and if not, whether to consolidate


    For more information on the measures of governance and administration for our Mastertrust please visit Mastertrust Chair’s Statement.

Award-winning features of our
Legal & General WorkSave Mastertrust

Award-winning features of our
Legal & General WorkSave Mastertrust

The Legal & General WorkSave Mastertrust is the largest commercial master trust in the UK and has won the Corporate Adviser Best Master Trust award consecutively in both 2021 and 2022. Here are just some of the reasons why:

  • We understand the importance of member engagement:
    • The annual member forum allowed us to reach more members than ever in 2021 with 9,612 members attending live on the day, with 4,186 questions submitted before and during the event
    • Our trustees have a Member Advisory Panel which was established in June 2021. The panel consists of a diverse range of members from a range of industries. It meets quarterly to provide trustees with an opportunity to hear direct feedback from members and understand what matters most to them
  • We keep our clients informed:
    • Our 24/7 interactive dashboard, My Scheme Intelligence (MySI), provides access to insightful information that keeps scheme managers up to date with the latest matters relating to their scheme. As the first provider to offer this, we were trailblazing in our approach to offering real-time scheme data and service-level tracking
  • We use technology to make pension management easier for our members:
    • Our app, Coll8, allows pension scheme members to access their pension on the go so they can feel in control of their retirement savings
    • We’re continually enhancing our secure pensions portal, Manage Your Account (MYA), which includes a virtual assistant so members can receive rapid and targeted online support, an interactive retirement planning tool, and lays the foundations for developments like the pensions dashboard
  • We care about the issues that our clients and members care about:
    • We teamed up with Tumelo, a fintech platform that allows members to vote on the environmental, social and governance (ESG) issues that matter to them. This allows us to factor in their views before we vote on these issues at company annual general meetings
    • We believe that responsible investing is crucial to mitigate risks, capture opportunities and strengthen long-term returns. In our 10th annual Active Ownership report, we outline the decisive action we took on behalf of our clients across a range of ESG issues
    • Our Mastertrust includes our L&G Target Date Funds – a unique default fund which offers a ‘to and through retirement’ strategy. A growth component with this strategy is the L&G Future World Multi-Asset Fund which we believe could help clients who also wish to offer their members a default arrangement with an even more positive ESG stance
  • We believe in member choice:
    • We make sure we provide choice and flexibility in how members take their pension when the time comes. Options include being able to access income drawdown within our Mastertrust without the need to transfer to a separate vehicle, which makes for a seamless transition from saving to spending
Man holding smartphone

Want to know more about making a value for money assessment?

For a quick overview of what to consider in general, plus a look at our own Legal & General Worksave Mastertrust and what it offers, read our Value for Money guide.

How we can help you with your assessment

If you’re the trustee or administrator of a DC scheme with assets of under £100 million, we’ve got the knowledge, expertise and resources to support you in meeting your new legislative obligations.

Through our fund centre, you can easily access the performance reporting information for our L&G Target Date Funds which are the default funds for our Mastertrust. You’ll need this information when carrying out your assessment.

For a broad guide on how our costs and charges might apply to your scheme, and to find information on net returns, please see our self-service fund centre.

To help you with your value for money assessment, we’ve listed all the relevant charges and expenses for our Sole Governance Fund Range in our consolidation transaction costs guide.

Please note that each plan is individually underwritten based on your specific member data. So, to provide an indicative administration charge for your scheme, please contact your usual Legal & General representative or complete the form below and a member of our DC business team will get back to you.

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WorkSave Pension Mastertrust

Easing the pension burden on employers. Helping to deliver better futures for employees.

Visit our dedicated Legal & General Mastertrust website

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If you would like any further information please complete the contact us form. 

Key risks

The value of any investment and any income taken from it is not guaranteed and can go down as well as up, and investors may get back less than the amount originally invested. The risks associated with each fund or investment strategy should be read and understood before making any investment decisions. Further information on the risks of investing is available from LGIM’s Fund Centres.

While LGIM has integrated Environmental, Social, and Governance (ESG) considerations into its investment decision-making and stewardship practices, this does not guarantee the achievement of responsible investing goals within funds that do not include specific ESG goals within their objectives.