On the go: Master trusts continue to be tardy in applying for authorisation from the Pensions Regulator, with the watchdog revealing that it has only received six applications for authorisation as at December 31 2018.
Master trusts have been given a six-month window from October 1 2018 to gain approval. So far, those who have applied for authorisation include Willis Towers Watson’s LifeSight and the Crystal and BlueSky master trusts run by Evolve Pensions.
The Pensions Regulator has identified 90 master trusts in the market. In its latest Master Trust Update it said: “Six schemes have exited the master trust market so far, and a further 29 have notified us of a triggering event to exit the market, and will transfer their members to an alternative master trust scheme or other appropriate vehicle. We expect the remaining 49 master trust schemes to either apply for authorisation or trigger their exit in the coming months.”
Everyone that has a significant role in running a master trust must demonstrate to the regulator that they meet a standard of honesty, integrity and knowledge appropriate to their role. Master trusts must also show that IT systems enable them to run properly and that there are robust processes to administer and govern the scheme.
They also have to show that there is a plan in place to protect members if something happens that may threaten the existence of the scheme, including how a master trust will be wound up.
Any scheme funder supporting the scheme must be a company (or other legal person) and meet the requirement that it only carries out master trust business. The scheme must show that it has the financial resources to cover running costs and also the cost of winding up the scheme if it fails, without impacting on members.
