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Triggering event duties for master trusts

Those involved with running master trust pension schemes have a duty to notify us about certain triggering events that may indicate that the scheme cannot continue to operate.

Triggering event duties

If you are involved with a master trust, you may have a duty to notify us about certain triggering events. These events may indicate that the scheme cannot continue to operate. You also cannot increase or introduce new member charges during a triggering event period or accept new employers into your scheme.

There are six duties that relate to triggering events.

1. Notify a triggering event to us

If a master trust experiences a triggering event, there are notification duties for trustees, scheme funders and scheme strategists. Some duties require notification within seven days of the event occurring, while others have to be notified within seven days of the person becoming aware of the triggering event. If the master trust scheme experiences more than one event, each event must be notified separately. If you are unsure whether a triggering event has occurred you should consider seeking your own independent legal advice.

Complete the triggering events form (PDF, 524kb, 9 pages).

When notifying us of a triggering event you will need to identify the scheme funder and scheme strategist for your master trust. A scheme funder is liable to provide funds to the scheme and/or is entitled to receive the profits of the scheme. The scheme strategist is responsible for business decisions relating to the commercial activities of the scheme. Download guidance on identifying scheme funders and scheme strategists (PDF, 66kb, 13 pages).

The table below sets out the triggering events with a description of the corresponding notification duties and who is responsible for notifying us. Download guidance on identifying and reporting triggering events (PDF, 71kb, 17 pages).

Triggering event Description Who must report Required notification date
 1 We issue a warning notice in respect of a decision to withdraw the scheme’s authorisation (standard procedure) This trigger event comes about through our actions, therefore we do not require a notification that a triggering event has occurred.
 2 We issue a determination notice that the scheme’s authorisation is withdrawn (special procedure) This trigger event comes about through our actions, therefore we do not require a notification that a triggering event has occurred.
 2A We issue a notification of its decision to refuse authorisation to an existing master trust
This trigger event comes about through our actions, therefore we do not require a notification that a triggering event has occurred.
 3 We issue a notification that a scheme is not authorised (master trust operating without authorisation)
This trigger event comes about through our actions, therefore we do not require a notification that a triggering event has occurred.
4 Insolvency event occurs in relation to scheme funder

Scheme funder

Trustees and a scheme strategist if they become aware the event has occurred

Before the end of seven days starting with the date the event occurred.

Before the end of seven days starting with the date the person notifying became aware the event has occurred.

5 Scheme funder unlikely to be able to continue as a going concern

Scheme funder

Trustees and a scheme strategist if they become aware the event has occurred

Before the end of seven days starting with the date the event occurred.

Before the end of seven days starting with the date the person notifying became aware the event has occurred.

6 Scheme funder decides to end the relationship with the master trust

Scheme funder

Trustees and a scheme strategist if they become aware the event has occurred

Before the end of seven days starting with the date the event occurred.

Before the end of seven days starting with the date the person notifying became aware the event has occurred.

7 Scheme funder ends the relationship with the master trust

Scheme funder

Trustees and a scheme strategist if they become aware the event has occurred

Before the end of seven days starting with the date the event occurred.

Before the end of seven days starting with the date the person notifying became aware the event has occurred.

8 Scheme funder, scheme strategist or the trustees decide that the master trust scheme should be wound up

The person or persons who take the decision

Trustees, a scheme funder and a scheme strategist if they become aware the event has occurred

Before the end of seven days starting with the date the event occurred.

Before the end of seven days starting with the date the person notifying became aware the event has occurred.

9 An event has occurred which allows or requires the master trust to be wound up The trustees, a scheme funder and a scheme strategist if they become aware the event has occurred
Before the end of seven days starting with the date the person notifying became aware that the event occurred.
10 The trustees decide that the master trust scheme is at risk of failure so it is necessary to follow continuity option 1 or 2

The trustees

A scheme funder and a scheme strategist if they become aware the event has occurred

Before the end of seven days starting with the date the event occurred.

Before the end of seven days starting with the date the person notifying became aware the event has occurred.

2. Duty to submit implementation strategy

When a master trust experiences a triggering event, the trustees must either:

  • transfer out all members and wind up (continuity option one)
  • resolve the triggering event to continue operating (continuity option two)

Download guidance on how to follow the continuity options (PDF, 74kb, 17 pages). Download a flowchart mapping continuity option one (PDF, 32kb, 1 page).

The trustees must submit an implementation strategy to us within 28 days of the triggering event (or a decision to refuse or withdraw authorisation becoming final), setting out which continuity option they will follow and their plan to do so. Download an implementation strategy template (DOC, 750kb, 8 pages).

3. Charge restrictions during a triggering event period

During a triggering event period you must not:

  • increase charges on or in respect of members
  • impose new charges on or in respect of members
  • impose charges on or in respect of members as a consequence of leaving or deciding to leave the scheme

A triggering event period starts from the date that the triggering event occurs until either:

  • we are satisfied that the event has been resolved
  • the members’ benefits have been moved to a different arrangement and the scheme has wound up

Download charges prohibition guidance (PDF, 55kb, 9 pages).

4. Charge restrictions on schemes receiving transfers

Your master trust may receive transfers from a scheme that has experienced a triggering event. If this happens you cannot increase or impose new charges on or in respect of members to cover:

  • costs incurred by the transferring scheme
  • costs that relate to transferring those members’ rights

5. Prohibition on taking on new employers

During a triggering event period the trustees, strategist and funder must not:

  • allow a new employer to join the master trust
  • enter into an agreement with a new employer to join the master trust after the triggering event period

A penalty can apply if new employers are allowed to join.

6. Resolving a triggering event

Once trustees following continuity option two are of the opinion that a triggering event has been resolved, they need to tell us within 14 days beginning with the date the triggering event was, in the trustees’ opinion, resolved. The notification must set out how the trustees consider the triggering event has been resolved. We will assess the facts and issue a notice to the trustees to confirm whether we are satisfied that the event has been resolved.

Complete the resolved triggering event form (PDF, 516kb, 10 pages).

Scheme engagement

We will engage with all schemes that experience a triggering event. We will discuss how you plan to resolve the event or transfer members to a different master trust and wind up the scheme.

We expect you to engage with us in an open and cooperative way. We are aware that the particular circumstances of a scheme will present different types of risks. We will take this into account when deciding how we will engage with schemes.

While we will usually request information on a voluntary basis, we are able to exercise formal information gathering powers to require information to be provided, and attendance at an interview with us to explain the information supplied.

If you don't comply

Failing to comply with your duties may result in a penalty of up to £5,000 for an individual and £50,000 in any other case.

When we consider whether to impose a penalty and the level, we will apply our risk-based approach and take into account the relevant facts of the case. For further information about the factors we generally consider when deciding whether to take enforcement action, see our master trust supervision and enforcement policy (PDF, 224kb, 23 pages).