Master Trusts will have their day in 2015, the managing director of Goddard Perry Consulting has said.
Next year will be “very busy” for the pension industry as it copes with more smaller employers auto-enrolling their staff, as well as the pension freedoms from April 2015, said Steve Goddard.
“I predict a number of the larger providers will struggle with service levels. Some insurance providers may indeed close to new business, which will be a concern for many,” he added.
“Advisers and clients want simple solutions to their pension needs, but with a tried and tested provider. And they will want their provider to be there in 10 or 20 years’ time.”
He said the rising popularity of Master Trusts could lead to more business coming their way, adding that one key to a good master trust would be to have the quality assurance standard AAF 02/07, which provides guidance for practitioners who provide assurance services on third-party operations, or the pensions quality mark.
Another key element would be the use of a tried and trusted administrator with at least 10 years’ experience in and knowledge of the UK maket.
“Master Trusts will have their day in 2015”, he said. “However, some of the smaller ones will fail if there are insufficient volumes to generate profits for the provider and the administrators.”
Background
In March this year, listed advisory firm Lighthouse Group launched an auto-enrolment solution called Lighthouse Pensions Trust, a multi-employer master-trust.
Malcolm Streatfield, chief executive of Lighthouse Group, said: “It allows employers to meet their legal obligations within a governance structure focused on good member outcomes and value for money.”