On the go: Thirty master trusts have applied for authorisation to the Pensions Regulator by the closing date for applications of March 31. A further 10 schemes have been granted an extension and are expected to file an application in the coming weeks.
According to the regulator’s website, just three master trusts have obtained authorisation to date: Legal & General WorkSave Mastertrust, Legal & General WorkSave Mastertrust (RAS) and Willis Towers Watson’s LifeSight.
Authorisation puts safeguards around master trusts – which have a total 14m members – by ensuring they are run by fit and proper people and have the right systems, processes, plans and finances in place.
Nine schemes have exited the master trust market so far, and a further 34 have notified TPR of a triggering event to exit the market, and will transfer their members to an alternative master trust scheme or other appropriate vehicle.
One scheme intends to exit the market, but is yet to submit a triggering event notification to the watchdog.
Nicola Parish, executive director of frontline regulation at TPR, said: “A number of applications have now been submitted and we are expecting more applications over the next few weeks from those schemes that have been granted an extension.”
She added: “We are confident that we will process these applications within the timeframes laid out in law. We always expected there to be a peak in applications and have planned accordingly.”
All existing master trusts had until March 31 2019 to apply for authorisation, trigger their exit from the market, or request an extension to the application period.
Commenting on the closing of the authorisation window, Mark Futcher, partner at consultancy Barnett Waddingham, said: “The providers have been much slower to apply for authorisation than the market expected, but it is right that the authorisation process is robust.
“To this end, the interesting news will be those providers who fail the authorisation process – this will inform where the bar has been set. We expect some large casualties.”
Mr Futcher added: “We are also mindful that master trusts are very similar to contract-based arrangements and we would like to see similar treatment across both groups.”
