Mercer’s master trust speeds up bulk annuity deals
Bulk annuity transactions have increased dramatically over the past year, as smaller defined benefit pension plans now finalize buy-ins in weeks instead of months. Consultants’ figures indicate that 2025 experienced an all-time high of between 350 and 375 bulk annuity deals, primarily because of improved efficiency in the small to mid-sized scheme sector. Every one of the 11 insurers currently active in the market contributed to this uptick, marking a departure from the industry’s former slow, incremental methods.
Transactions completed in weeks
The Mercer DB Master Trust recently executed three separate buy-ins with Just Group within a three-week span, illustrating how coordinated efforts can accelerate deal timelines. The process was overseen by Mercer’s risk transfer specialists, the trust’s independent professional trustees, and legal counsel from Stephenson Harwood. Because the trustees had prior experience managing buy-ins, the team could concentrate on critical decisions rather than foundational explanations.
Andrew Pugh, Mercer’s risk transfer lead for the DB Master Trust, highlighted that the success depended on creating a streamlined workflow involving all stakeholders. He said the collaboration helped transactions move quickly by facilitating a streamlined process. The trust’s board comprises three professional trustee firms—PAN Trustees, Independent Governance Group, and Zedra—whose combined expertise helped eliminate typical delays that often plague less experienced boards.
Pre-contract data review
A distinctive but effective strategy involved conducting a data cleanse for each of the three master trust segments before finalizing the buy-in agreements. While this step is usually performed after a transaction, in this case, it was completed upfront with input from Mercer’s advisers and Just Group. A standardized workflow was established beforehand, clarifying cost structures and minimizing later adjustments.
Pugh explained that this approach reduced the gap between buy-in and buyout, simplified premium calculations, and expedited the wind-up process. He said, “by transacting three fully segregated sections together we were able to capture economies of scale, securing insurer capacity and pricing that would unlikely be available to them as standalone schemes.”
These improvements reflect broader industry shifts. Over the past few years, insurers and consultants have introduced faster processing methods for small schemes, and legal firms like Stephenson Harwood have adjusted their practices accordingly. The firm’s Derisking Pathway now leverages recycled disclosure templates and AI-driven document review tools to cut redundancy and lower costs.
Estella Bogira, a partner at Stephenson Harwood, commended the cross-party collaboration. She said, “The whole Mercer DB Master Trust team, led by Tim Ball, and working very closely with Just, really are exceptional. And our client, the trustees, have been outstanding, working alongside Mercer to develop a route that puts member outcomes first.”
Pooling transactions for efficiency
Legal and regulatory hurdles continue to influence the pace of bulk annuity deals, particularly for schemes with complex membership structures. Just Group’s underwriting team reported that schemes with fewer than 50 members now account for nearly 40% of its annual bulk annuity volume. Consultants predict that by 2027, schemes with assets under £50 million could represent up to 30% of total bulk annuity transactions, up from around 15% in 2023.
Tim Ball, Mercer’s head of the DB Master Trust, emphasized that the trust’s ability to bundle transactions has been a key factor in securing competitive pricing. He noted that the trust’s use of standardized templates for member disclosures has further reduced administrative burdens, allowing insurers to focus on underwriting rather than paperwork.
