The last of 38 master trusts expected to apply for authorisation have now submitted their applications to The Pensions Regulator (TPR), its latest update reveals.
According to the watchdog’s data – unveiled today (14 May) – of the 10 master trusts which were granted an extension of up to six weeks after the end of March deadline, eight had submitted applications. One scheme no longer met the definition of a master trust, and another decided not to apply for authorisation, it said.
TPR head of master trust authorisation and supervision Kim Brown noted the regulator will be continuing to assess these applications over the coming months.
“Once authorised, master trusts will immediately be supervised by us. The supervision of authorised master trusts is vital to ensure the new standards imposed in this market are not only demonstrated to us as part of the application process but also continue to be met in the future.
“Supervision aligns with our new approach to regulating trust-based pension schemes and is an example of how we are working more proactively to tighten our regulatory grip to protect savers.”
When the authorisation regime started last October, 87 master trusts were operating in the market and had the option to apply. The schemes which did not apply either triggered their exit from the market and transferred members to an authorised scheme, consolidated into another master trust, or did not fall under the definition of a master trust and were void from the process.
Barnett Waddingham head of defined contribution Mark Futcher 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 that members are better protected and benefit from better outcomes.”
The most recent to submit applications were the BCF Pension Trust, Now Pensions and SuperTrust. Just six master trusts have been authorised by the regulator, with the Universities Superannuation Scheme’s (USS) USS Investment Builder – which was the latest to be given the stamp of approval today (14 May).
Some 44 schemes have exited or triggered their exit from the market according to TPR’s latest exit figures. This includes the McDonald’s Franchisee Pension Scheme, which was recently found to have fallen under the definition of a ‘master trust’ and fined £104,000 for a number of breaches of law.