The timescale for master trusts to comply with the new authorisation regime coming into force in October are "unrealistically short," Now: Pensions has argued.
The workplace pension provider, with 1.5 million members, flagged concerns in its response to The Pensions Regulator (TPR) consultation of its code of practice for master trust authorisation, published in March.
The code outlines how master trusts will be expected to meet the new authorisation criteria and what they will need to evidence for the regulator to grant authorisation and to continue to operate in the workplace pensions market.
In its submission, Now: Pensions stated: "We think that the new code is very comprehensive as currently drafted, and would caution against adding any further elements to this as we believe that the timescales for authorisation are already unrealistically short.”
The government and the regulator have been discussing these new rules since 2016, which are expected to drive consolidation in the market.
Authorisation will commence on 1 October and existing schemes will have six months from that date to apply to for authorisation.
However, master trusts can start submitting voluntary applications for the new registration regime as soon as May.
Now: Pensions explained the limitations of the authorisation timescale.
The provider said that since the regulator's consultation was open until 8 May, the final code cannot be laid in Parliament before then.
It stated: "We understand that the normal process for codes of conduct are that secondary legislation bringing them into effect is by a negative procedure lasting with 40 days.
"As we count only 51 sitting days in the Parliamentary timetable between 8 May and 1 October, we are concerned that we may still be making our authorisation application in October on the basis of a code that is still be finalised."
A TPR spokesperson said: “The timescales of authorisation are established by Parliament.
“They may mean that the code of practice is still in Parliament when the authorisation window opens. However once the code of practice is laid in parliament, which we anticipate will be in July, there will not be any further changes to the code.
“We have been working with master trusts for two years, including keeping schemes up to date about the process of implementing authorisation and the code of practice. We will continue to engage with schemes as we take consultation responses on the code of practice into account."
In addition, the provider is "concerned about the volume of applications that will be made within these timescales, and the potential for delays in the authorisation process that follows".
Given this, Now: Pension is advocating that the government and regulator need to give careful consideration as to how the results of applications for authorisation will be announced.
The provider stated: "The market will be distorted and master trusts commercially damaged if announcements of who has been authorised come out piecemeal with gaps in between.
"We therefore suggest that those that submit an application in October 2018 should have their authorisations all announced simultaneously."
The TPR spokesperson added: “We have a legal obligation to publish a list of authorised master trusts, which we will publish in batches based on when they are filed to us.
“When deciding how to publish this list we have worked hard to ensure we are reasonable and fair.”
Other providers, however, are confident in the regulator's capacity to work with the limited available time.
Claire Altman, head of financial services at Smart Pension, said: "Whilst the timetable is a challenge, this was established by Parliament and we have experienced at first-hand how carefully The Pensions Regulator has worked to bring the industry along with them despite these challenging deadlines."
maria.espadinha@ft.com
