Industry figures have branded The Pensions Regulator’s website “unrepresentative” and called on it to display a whole of market view of the pension industry.
Complaints have arisen partly due to the fact that the only master trusts listed are those which have master trust assurance. There are now a total of seven master trusts on the wesbite, out of a total of 72 open and registered master trusts.
Henry Tapper, founder of auto-enrolment service Pensions PlayPen and director at pensions consultancy First Actuarial, said the lists on the TPR website, are “not a representative example of what is out there”.
He said the Association of British Insurers’ list has also come under fire, because it does not include self-invested personal pensions, which cannot be included because they are not members of the ABI.
“It’s not necessarily TPR’s fault but it really has a case to answer what is out there,” Mr Tapper said. “What’s on the website is different from what’s out there. There are very few places for employers to go to get informed choice other than IFAs.
He added there was a lack of guidance on the TPR’s website.
It’s not necessarily TPR’s fault but it really has a case to answer what is out there Henry Tapper“The master trust assurance framework does nothing to stop a company going bust - there is no capital adequacy in the master trust assurance framework - it’s not protection, but it is being sold as such.”
Andrew Pennie, marketing director at Intelligent Pensions, said finding a definitive list of all the master trust arrangements available is virtually impossible.
There are no regulatory controls and checks in place when a master trust is set up and that often means the first a regulator hears about a new trust is from HM Revenue & Customs, he pointed out.
“TPR, working with the Institute of Chartered Accountants in England and Wales, has developed the master trust assurance framework, which is designed to help trustees assess the quality of their scheme, but unfortunately only a handful of the larger master trusts have taken up this voluntary code,” Mr Pennie said.
“Clearly, a definitive list of all pension arrangements would be beneficial, particularly where all arrangements have had to meet certain regulatory standards and requirements.”
Mr Pennie said it would be hard to ask TPR to do more if they have no regulatory powers over these missing schemes.
“Until they are given regulatory power, I think it’s fair they only reference the master trusts who have undertaken the voluntary assurance framework code. That isn’t a great outcome overall and hence why new regulatory powers and controls are needed, and quickly.”
A spokesperson for TPR said the criteria for joining the Master Trust Assurance List will now include having clear, accurate and prominent messages regarding tax relief in member communications. “This means that we are reviewing the member communications of schemes currently on the list and those wishing to join it.”
The spokesperson said master trust assurance signposts employers to schemes that have obtained an independent audit of their governance standards and controls against a defined set of objectives, which align with the standards in TPR’s code for defined contribution schemes.
“We have published a list of schemes who have obtained master trust assurance and met our other criteria, and our guidance to employers choosing a scheme to comply with their automatic enrolment duties indicates which of these schemes are open to all employers,” said the spokesperson.
“We urge all small employers preparing for automatic enrolment to choose a high quality large scheme such as a master trust or a group personal pension plan.”
ruth.gillbe@ft.com
