Master Trusts – “Beyond” the Thunderdome
13th June, 2019
I wrote a Hunger Games inspired Master Trust blog a few months ago and had planned to update about now once the dust had settled. With the 31 March deadline this seemed about the right time. This blog will contain further Hunger Games puns as I haven’t watched Mad Max recently.
A quick glance on the TPR website today (https://www.tpr.gov.uk/en/master-trust-pension-schemes/list-of-authorised-master-trusts) shows only six authorised Master Trusts. Well done to these strong warriors who have survived “the Games”.
However, the show is not over. There are several Master Trusts who have been granted extensions to mid May. There are also several feeding their way through the system. Therefore, the landscape remains uncertain.
The consolidation of master trust providers is going at pace. We have seen several larger Master Trusts purchase the business of exiting players. This seems to be flowing well, a bi-product of the requirement to have a “living will” for any potential market exit. This will remain a feature over the upcoming months.
The Master Trust Assurance Framework process is not a simple box ticking exercise. We are yet to see the first rejected application. However, that is certainly a possible outcome. There is some time for remedial action, so these are unlikely to flow through until later in the year. I assume at that stage we will hear two cannons and their logo will be projected in the sky above Brighton.
This is an uncertain time for employers who are not in the larger Master Trusts. I have a lot of sympathy for the small businesses who have engaged with pensions for the first time, and may find themselves changing suppliers. I also feel for the staff whose first experience of pensions may be some fairly lacklustre results and being dragged from pillar to post.
I have written several blogs on this subject (as have many others). This issue was completely foreseeable. The key questions for me are:
- Why didn’t we fix the Master Trusts before we put everyone in them? And/or
- Why didn’t we have a process to authorise advisers for auto enrolment selection?
I shall diary this for Q4 and hopeful then I can write a blood and guts pun filled opus on the final outcome. Then we will storm the Capital! (Hunger Games pun, not actual request).