12 Oct 2018
A new law has come into force to protect pension savers.
Every new and existing master trust will now have to apply to The Pensions Regulator (TPR) for authorisation to show they meet the tough new standards designed to increase safeguards for 10million members.
Under the legislation, master trusts must have fit and proper people, sufficient financial reserves, robust systems and adequate plans in place to get authorisation and operate in the market.
TPR will then supervise schemes to ensure they continue to meet their legal duties.
Existing master trust schemes now have six months to file an application to TPR for authorisation to continue to operate in the market, while new master trusts must be authorised before they open for business.
Nicola Parish, executive director for frontline regulation at TPR, said:
"We pushed for extra protections around this market and are pleased that the law has come into force today.
"The success of automatic enrolment has led to rapid growth in master trusts. Authorisation and supervision is vital to ensure 10million savers can have confidence that their retirement savings are safe."
To ensure master trusts are ready to apply for authorisation, TPR has been in discussions with providers. It has published a code and guidance with the support of the industry and ran a voluntary readiness review programme which gave schemes an opportunity to provide a draft application to TPR and receive detailed feedback.
"We have worked hard to ensure we have been clear about the evidence we require from master trusts to demonstrate they meet the standards laid out in law.
"It is now up to trustees to review the code of practice and guidance, and submit applications through our portal."