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DB Consolidation

Running a Defined Benefit (DB) pension scheme is a complex and time-consuming process. Finance Directors and Pension Managers are dedicating large chunks of time and money to this legacy problem. Now schemes are increasingly turning to a more efficient option - 'DB Consolidation'

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TPT named ‘DB Master Trust/Consolidator of the Year’
 For 2 years running, we are proud to be the winner of the UK Pensions Awards ‘DB Master Trust & Consolidator of the Year’ award 2020 and 2021.

What is consolidation?

Consolidation is when various elements of managing a pension scheme are combined, meaning they can be run more efficiently together than on their own. This allows schemes to benefit from improved funding, economies of scale and better governance, providing greater security for its members.

DB pension consolidators come in different shapes and sizes, including DB Master Trusts like TPT.
Why is there so much interest in consolidation?
Why is there so much interest in consolidation?
Running a DB pension scheme is becoming more challenging for businesses and scheme trustees with new rules and regulations being introduced. These rules have savers’ best interests at heart but implementing them can be complex. From GMP equalisation to GDPR, keeping compliant is becoming a full-time job.

The Pensions Regulator (TPR) who regulate the UK’s workplace pensions market and work to ensure that employers and trustees fulfil their duties for members, have made consolidation a central element of their focus on DB pension schemes. 

And the message from the TPR is clear. If pension schemes are struggling to keep up with industry best practice, they should move savers into a professionally managed scheme.

 The consolidation debate is gathering pace – there is political will, regulator desire and commercial momentum.Mike Ramsey, CEO, TPT Retirement Solutions

Consolidation, consolidation, consolidation

The regulator has made it clear that they ‘want to accelerate the consolidation of pension schemes’ and have stated that their vision for the future of occupational pensions is ‘one where all savers are in schemes that have excellent standards of governance that deliver good value’ which will mean ‘having fewer, but better governed schemes in the market.’ 

This, the TPR says ‘will be good for savers’ who will benefit from ‘more efficiently run pensions, with the right people in place to make better investment decisions.’  

Beyond the regulator, there is a broad consensus amongst the Government – the department for Work and Pensions (DWP) - and the Pensions and Lifetime Savings Association (PLSA) who all recognise the benefits that having fewer, larger pension schemes can bring to members and employers; encouraging the industry to embrace consolidation as has been seen across Europe and more widely in countries such as Australia. 

So what are the benefits of consolidation?​

By entrusting their DB scheme to TPT, schemes can access and benefit from:

  • Risks managed using sophisticated investment techniques, many of which may not be available to individual schemes
  • Joining a modern, forward thinking organisation with a heavy investment in technology to provide a high level of service to our customers
  • A highly experienced trustee board providing governance oversight
  • Access to more efficient and award-winning administration
  • Tailored member communications
  • In-house legal, actuarial and covenant services
  • For each scheme, a bespoke funding and investment strategy is individually tailored
  • With £14.1 billion of assets under management (as at 30 September 2021), we are able to achieve significant economies of scale, which are directly passed on to our members
DB Complete Graphic
Help is at hand
Help is at hand
Adoption of consolidation is starting to quicken. Aside from achieving a better quality service, the cost savings achieved from a single organisation providing services under one roof can be massive - money which could be better spent on achieving better, more certain outcomes for members. TPT’s experience indicates that a typical saving might be up to 30% on adviser, administration and investment fees.

Consolidators will be required to have expertise - beyond administration, in actuarial, investment, communication, fiduciary, and so on, far beyond the scope of an administrator.

Finding the right partner is important.

But what is clear, is that consolidation is the future for DB pensions schemes. 

TPT Retirement Solutions has £14.1 billion of assets under management (as at 30 September 2021), and is an award-winning Defined Benefit (DB) Master Trust managing schemes for 2,600 employers and 400,000 members. Employers have been trusting us with their pension arrangements for 75 years and as a not-for-profit organisation with no shareholders, any surplus we make can be used to reduce costs and improve service.  

​The DB Complete solution

TPT's DB Complete is a full-service package for Defined Benefit schemes. It provides total reassurance for time poor FDs, Pension Managers and others who are involved in running the DB scheme. Best-in-class trusteeship, administration, investment, actuarial, legal, covenant and communications services are all housed under the one roof with DB Complete, making the process of running a DB scheme more efficient.

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UKPA Winner 2020
European Pensions Awards 2020 Winner

Interested in finding out more?

If you are interested in DB Consolidation and TPT's DB Complete solution,
please complete the short form below or call us on 0113 234 5500.