On the go: Only eight master trusts have applied for authorisation with the Pensions Regulator, leading to expectations that there will be a last minute dash as the March 31 deadline looms.
Master trust authorisation was introduced to raise standards for the 10m members saving into them.
Among the frontrunners who have already applied for authorisation are Willis Towers Watson’s LifeSight, Legal & General and Evolve Pensions, which manages Crystal Trust and Blue Sky.
Of the 90 master trusts originally in the market, seven schemes have left and a further 31 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. TPR expects the remaining 44 master trust schemes to either apply for authorisation or trigger their exit from the market in the coming months.
TPR says in its February update published today: “For those master trusts that choose to exit the market, or fail to get authorised, we will oversee the process to satisfy ourselves that members are transferred in a safe and timely manner and employers continue to meet their automatic enrolment duties – taking enforcement action if necessary.”
Commenting on the update, Sharon Bellingham, senior consultant, Hymans Robertson, said:
“Last summer, ahead of the authorisation window opening, there was concern that master trust providers would rush to submit applications. The driver for an initial stampede was the perceived commercial advantage that an early application might provide.
“The message from TPR was, however, loud and clear – don’t be the first to fail and be sure to take time, applications must be robust, thorough and detailed. Consequently the early rush didn’t materialise and we can see that time is indeed being taken.
“Given the extensive scale of the requirements, that time is very much needed. So, with the 31 March deadline rapidly approaching and only seven weeks remaining, it is likely that for some, it is going to now be a dash to the finish line.”
