The Pensions Regulator (TPR) has received voluntary applications for the new registration regime from 33 master trusts, more than a third of the number of providers currently in the market.
The watchdog announced in March it would launch a readiness review in May to help these schemes prepare for formal application, which they will need to file if they want to continue to operate in the market.
However, submissions as part of this review weren’t binding, as the workplace pension providers will have to submit a formal application when the window for registration opens in October.
The Pensions Regulator said last year that 87 master trusts were registered at the time.
A spokesperson for the regulator told FTAdviser that 33 master trusts submitted a formal readiness review application.
However, she added this was not indicative of the number of master trusts The Pensions Regulator expects to apply for authorisation.
She said: "Readiness reviews are a voluntary process and more schemes accessed the online readiness review portal than submitted a full application or have indicated to us that they still wish to apply for authorisation.
"After two years of engagement with the market, this figure was in line with our expectations of how many applications we would receive for readiness reviews."
An official at The Pensions Regulator revealed in May that the watchdog is expecting the market to shrink to 50 providers after the registration process is complete.
Under the new rules, which will come into effect in autumn, master trusts will have to hold enough capital to cover the cost of a worst-case scenario, such as the cost of transferring to another scheme or of winding up, without charging members.
The government and the regulator have been discussing these new rules since 2016, which are expected to drive consolidation in the market.
Kim Brown, head of master trust authorisation and supervision at the regulator, said in March that The Pensions Regulator was aiming to give feedback to schemes on their readiness reviews by 31 August, regarding the quality of their evidence and any areas that need to be improved.
Mike Lacey, partner at Berkshire-based financial adviser firm Bowman Pension Consulting, said he was surprised by the number of master trusts that applied for the readiness review, since less than half of the providers decided to do so.
He said: "If The Pensions Regulator are offering to ‘sense check’ master trusts' readiness for authorisation, surely it would be prudent for as many as intend to apply for authorisation to actually engage in this process.
"I expect the time spent undertaking the process would not be insignificant, but I have to wonder if a lack of engagement reflects lack of readiness."
maria.espadinha@ft.com
