The number of employers moving employees to a multiemployer arrangement as a defined contribution plan of choice is set to double over the next three years in the U.K., according to a research by Willis Towers Watson's master trust, LifeSight.
The survey of 190 businesses showed 71% of corporations either have reviewed their DC plan arrangement or will do so in the next two years. Some 26% of respondents said they will move to a multiemployer plan — known in the U.K. as a master trust — in the next three years, up from 12% now using the structure.
In turn, the usage of single trusts is set to decrease to 23% from 34%, while use of group personal pension plans will go to 47% from 50%, according to the survey.
Willis Towers Watson said the projected growth is driven by plan sponsors making the move in a search for better outcomes for participants and better communication tools.
However, costs remain a key barrier to changing DC programs, said 43% of the surveyed organizations. Also, for 43% of organizations, internal staff don't have the time to enact a change, while 41% thought the master trust provision is too complex to implement.
In other survey findings, 31% of organizations said they will review their fund's default strategy in the next year. Some 28% of businesses plan to boost contributions in the next 12 months.
"With the master trust market having experienced rapid growth since its inception, it is no surprise that the survey shows more organizations moving toward master trusts. However, we do anticipate more consolidation in the market ... This is good news for prospective employers and members, as those master trusts left standing will be able to achieve the scale necessary to improve their offering to members," David Bird, head of proposition development at the £2 billion ($2.6 billion) LifeSight, said in a news release on the survey findings.