News / 29.07.20

A closer look at Citrus

Hymans Robertson, one of the UK’s leading pensions consultancies, has recently published a series of publications exploring DB consolidation options. Their latest publication takes a ‘closer look’ at Citrus, providing some in-depth analysis. Below we provide a summary of the findings:

What is Citrus and how does it work?

Citrus operates on a not-for-profit basis and is run by a board of Trustees who are nominated by sponsoring employers and members, chaired by a Professional Independent Trustee.

The key difference between DB master trusts like Citrus, and commercial consolidators, is that the link with the employer covenant is retained with a DB master trust. On the one hand this means there is no clean break for the employer from their DB liabilities. However, on the other hand it also means that employers can transfer their schemes into Citrus without needing a large upfront cash injection – or regulatory clearance. Instead they continue to fund the deficit over time in the same way that they would in their own scheme.

What are the benefits of Citrus for employers and members?

Lower running costs

One of the key benefits of transferring to Citrus is the significant reduction in running costs. Through cost-sharing with other employers and economies of scale, the average running costs for a scheme within Citrus are over 30% lower than that of a standalone scheme.

The biggest cost savings are achieved for schemes with 100 members or more.

There is an upfront transition cost, but the payback period is short due to the lower running costs. Payback periods are usually under 2 years.

Free up management time

With the governance structure outsourced to the Citrus Trustee board, the burden of finding and training suitable trustees is removed from the employer. The amount of employer time needed to run the scheme and engage with the trustees is also reduced.

Efficient investment strategy to reach your funding target sooner

Through economies of scale, a greater mix of assets can be accessed in Citrus than is typically available to smaller schemes. Citrus’s investment strategy is capital efficient, with a 25% improvement in expected return for each unit of risk taken, compared to a typical strategy in a smaller scheme.

Better risk transfer pricing

Citrus can be a stepping stone to buy-out, or a commercial consolidator, and the efficient investment strategy enables schemes to reach their long-term objective sooner or with more certainty. However, Citrus can also group sections together to approach the buy-out market.

Outcomes within Citrus vs example standalone scheme:

The table below shows the benefits for an example scheme with 300 members, assets of £50m and a funding level of 95% on IAS19:


Example standalone scheme

Scheme within Citrus

Annual running costs – advisers and admin


£85k p.a.

Scheme lifetime costs1



Annual running costs – internal management time

10 days per year

2 days per year

Time to reach buy-out

7 years

6 years

Downside risk2



 1This includes total running costs over the expected time period to buy-out and advisory costs of a buy-out through Citrus.

2A measure of how much worse the deficit of the scheme could be in 1 year's time in the worst 1 in 20 potential outcomes.

We have developed a calculator to allow you to see the potential outcomes for your scheme’s specific circumstances:

Try the calculator

When might Citrus be an appropriate option to consider?

Transferring your DB scheme to Citrus is likely to benefit employers with small to medium sized DB schemes, particularly those who:

  • Want to reduce the running costs of their scheme, while retaining a quality service for members
  • Want to outsource the governance of the scheme to save management time
  • Want to access a wider range of capital efficient asset classes to boost returns and/or reduce risk
  • Want to shorten the timeframe for reaching their Long-Term Objective

Hymans Robertson’s analysis suggests 14% of companies in the FTSE350 have at least one scheme which could benefit from moving to a master trust arrangement and predict that around 1 million members will be consolidated into a DB master trust by 20421. Additionally, 35% of DB trustees would consider moving to a DB Master Trust.2

1 Source: Hymans Robertson, DB consolidation: when, not if, 2018

2 Source: Hymans Robertson, research amongst 100 Trustees of DB schemes with assets over £100m, 2020

Read the full report

Our Chair of Trustees also recently featured as a guest in Hymans Robertson's podcast on DB consolidation.

Listen to the podcast