The Pensions Regulator (TPR) has outlined how authorised master trusts will be supervised, in a draft policy published for consultation today.
Master trust authorisation launches in October this year, when schemes will have six months to apply to TPR to continue to operate in the market.
Schemes which achieve authorisation will then be supervised by TPR on an ongoing basis, to ensure that they continue to meet the authorisation criteria as well as other relevant legislation and codes of practice.
The Master Trust Supervision and Enforcement Policy published for consultation today outlines how TPR will supervise all schemes as well as more intensively scrutinise higher risk master trusts.
The document also details how TPR may use its powers to enforce against master trusts if problems arise or legislation is breached, and ultimately withdraw authorisation if a master trust no longer meets the authorisation criteria or other obligations.
The supervision of master trusts aligns with TPR’s new risk-based approach of proactively overseeing all types of pension schemes, which is being developed as part of the TPR Future change programme.
Kim Brown, Head of Master Trust Authorisation and Supervision at TPR, said: “Authorisation will create a market with better safeguards.
“To do that we need to set the standards which every master trust must meet to operate once they have been authorised, or set up in the market. We will also supervise these schemes to ensure that they continue to meet the authorisation criteria, are well-run and offer good value for members.
“Our policy outlines how we will be collaborative in supervising schemes, but tough to use our powers, including de-authorising schemes, if they drop below the standards outlined in legislation.”
The consultation on the policy runs until 23 August.
- The Pension Schemes Act 2017 and Occupational Pension Schemes (Master Trusts) Regulations 2018 introduced authorisation and supervision of master trusts by TPR.
- Code of Practice 15: Authorisation and supervision of master trusts and related guidance set out how trustees can satisfy, and continue to satisfy, TPR that a master trust meets the authorisation criteria.
- Master trusts remain subject to other relevant legislation and codes of practice including but not limited to the Pension Schemes Act 2004 and the Pensions Act 1995.
- TPR is the regulator of work-based pension schemes in the UK. Our statutory objectives are: to protect members’ benefits; to reduce the risk of calls on the Pension Protection Fund; to promote, and to improve understanding of, the good administration of work-based pension schemes; to maximise employer compliance with automatic enrolment duties; and to minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of TPR’s functions under Part 3 of the Pensions Act 2004 only).
Kimberly MiddletonMedia Officer (DC)