On the go: The HSBC Master Trust has become the first new scheme to be authorised by the Pensions Regulator, bringing the total number of authorised schemes to 38.
New master trusts are subject to the same authorisation criteria as the existing schemes that went through the process in 2019. In November, the regulator finalised the authorisation process, with a final tally of 37 master trusts approved.
A HSBC spokesperson said: “HSBC confirms that it has gained approval from TPR to offer a master trust in the UK’s defined contribution market. The approval process has been extremely rigorous, underlining the security and robustness of the master trust framework.
“We will continue to work closely with our key stakeholders before bringing this proposition to the wider UK pensions market. We are committed to helping members achieve their retirement goals within a robust governance framework, and offer employers a solution to managing their pension obligations.”
Under the new registration process, master trusts are required to hold enough capital to cover the cost of a worst-case scenario, such as the cost of transferring to another scheme or of winding up, without charging members.
The change in legislation prompted more than half of the 81 master trusts operating in the market in January 2018 to leave, partly because they realised their business could no longer be classed as a master trust, while some others entered the market.
