“It is difficult to see why companies would willingly take on an additional financial burden that will come with the new rules when they can in fact save money on the current cost of managing schemes,” says PwC pension partner Munro O’Dwyer. “In our experience, the savings could be as high as somewhere between one-third and one-half.”“If you have employers paying €120,000 to manage their company pension scheme now, they could be saving around €60,000,” he says.
However, a survey conducted by PwC recently found that more than half of the employers surveyed had yet to decide on a move to a master trust and in excess of four in 10 were sceptical that it would save money. “It is very hard for any employer to defend not going down the master trust route, ” says Mr O’Dwyer. However, he thinks many companies will find themselves battling the full implications of the new rules news year before realising that it makes no sense to keep the burden in-house.