The Pensions Management's working group on mastertrusts has revealed that while the industry welcomes authorisation with open arms, particpants remain unclear on what form the new regulatory regime will take, writes PMI president Lesley Carline.
Love them or hate them, they are definitely here to stay. However, debates over how many there should be, how best to regulate them, and whether they should be not-for-profit or commercial, have gathered momentum over recent years.
With the mastertrust authorisation regime coming into force at the beginning of October 2018, it has never been more important for the industry and the bodies that represent it to fully understand the ins and outs of these schemes, ensuring good quality of service is delivered to members.
There are residual concerns around how the regulation will be implemented
In order to support professionalism and learning in the industry, the Pensions Management Institute earlier this year set up a working party consisting of representatives from mastertrust providers, trustees, and legal advisers to the schemes, to ask what we can do to provide information, thought leadership, and education for the membership, and the industry in general.
Industry agrees dashboard is vital
From our working group conversations, it has been clear that consensus is yet to be reached on debates such as the appropriate level of regulation, benefits of consolidation, skills shortages, the role of technology, and controversial issues such as the balance of power and role of trustees.
Two areas were highlighted in particular; the pensions dashboard and how the authorisation regime will be implemented.
It will come as little surprise that the pensions dashboard was viewed as an essential tool in ensuring consumers have access to all their pensions savings in one place and feel empowered to make their own decisions.
It is therefore encouraging to see that Esther McVey has now decided to back the initiative. However, the onus will still be on the industry to ensure it is implemented correctly and that all pension providers work collaboratively to provide data to this important central resource.
Questions remain over new regs
Additionally, we found there has been an overwhelmingly positive response to authorisation. The Pensions Regulator will have the power to intervene where schemes are at risk of failing, ensuring good governance and therefore value for members.
The new measures should also provide consumers and employers with confidence. However, what was clear from our working group conversations is that there are residual concerns around how the regulation will be implemented, particularly the level of supervision from the regulator, and more worryingly around how prescriptive its regulation will be – a major question mark hanging over the sector.
Lesley Carline is president at the PMI and director at KGC Associates
