On the go: A total of 38 master trust authorisation applications had been submitted to The Pensions Regulator by Tuesday, as the extension period closed with more casualties expected.
Of the 10 schemes granted an extension, eight have filed an application, one scheme no longer meets the definition of a master trust, and another has decided not to apply for authorisation.
Master trust authorisation was brought in to implement standards in this growing market and better protect the almost 14m people saving into these schemes. It puts standards in place in five areas: fit and proper persons; financial sustainability; scheme funder; systems; and processes continuity strategy.
Last year there were thought to be 90 master trusts on the market, but only six have so far received authorisation: The BlueSky Pension Scheme, The Crystal Trust, Legal & General WorkSave Mastertrust, Legal & General WorkSave Mastertrust (RAS), LifeSight and Universities Superannuation Scheme. These all feature on TPR’s list of authorised master trusts.
Kim Brown, head of master trust authorisation and supervision at TPR, said: “We now have the final number of applications for existing master trusts and we will be continuing to assess these applications over the coming months.”
Commenting, Mark Futcher, partner and head of defined contribution at Barnett Waddingham, said; “The most interesting aspect of the authorisation process will be those master trusts that do not receive authorisation. We would expect a number of casualties from this list of 38; the industry knows there are still some poorly run master trusts out there – some still have historic errors to rectify.
“On an ongoing basis, we would expect the bar to rise, which would mean some master trusts winding up in the future. As assets and memberships grow, the successful master trusts can start to really differentiate themselves to ensure members are better protected and benefit from better outcomes.”
Writing on a TPR blog, Ms Brown explained the regulator’s approach in the future: “All schemes will have to send annual submissions to us, including the chair statement, scheme annual report and accounts, scheme funder accounts and a supervisory return, which will ask for updates against the five authorisation criteria.”
She added: “Schemes will be expected to be open, honest and transparent and proactively volunteer information to us about any material developments, risks and issues.”
