The Pensions Regulator and the government are concerned that member savings may be at risk from master trusts who fail to meet minimum governance standards. A new two stage process of authorisation and on-going supervision of master trusts will come into force from April 2017.
Master trusts will have to demonstrate that they meet five key criteria:
- Persons involved in the scheme are fit and proper;
- The scheme is financially sustainable;
- The scheme funder meets certain requirements in order to provide assurance about their financial situation;
- Systems and processes requirements, relating to the governance and administration of the scheme, are sufficient; and
- The scheme has an adequate continuity strategy.
The on-going supervision of master trusts includes:
- The Pensions Regulator maintaining and publishing a list of authorised master trust schemes; and
- A requirement for trustees of an authorised master trust to submit annual accounts to the Pensions Regulator.
The Regulator will take action where the key criteria are not met. This includes a fixed penalty notice of up to £50,000 for a person failing to comply with a request for information.
Award winning governance extranet
We can work with you to develop good governance for your master trust, using our award winning governance extranet:
- To demonstrate compliance of your master trust with the five key criteria.
- To work to qualify as an authorised master trust on the Pensions Regulator's list.
- To ensure that annual accounts are submitted for the master trust, working with your accountants; and
- To develop an agreed business plan for your scheme for on-going governance.
Please get in touch with Sasha Butterworth
or Lucy Kirk
to discuss how we can help you.
This publication is intended for general guidance and represents our understanding of the relevant law and practice as at October 2016. Specific advice should be sought for specific cases. For more information see our terms & conditions.