Defined Contribution  

First master trust receives authorisation

First master trust receives authorisation

The Pensions Regulator (TPR) announced today (February 20) that it has authorised the first master trust under its new rules.

LifeSight, Willis Towers Watson's defined contribution (DC) multi-employer pension trust – with 75,000 members and £2.5bn in assets under management - was the first to apply for authorisation, which has now been granted.

Nicola Parish, executive director of frontline regulation at TPR, said the first authorisation of a master trust was "a landmark moment and a step towards a market of schemes with better safeguards around them".

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She added: "By the end of the year every master trust that continues to operate will have proven that its scheme and its trustees meet the standards laid out in the legislation and our code of practice.

"This will better protect the millions of members and billions of pounds in those schemes.

"Authorised master trusts are a good option both for employers looking to fulfil their automatic enrolment duties and for trustees of schemes who are looking to consolidate."

Under the new rules, providers 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.

Guy Opperman, minister for Pensions and Financial Inclusion said the new authorisation was an important moment for the pensions industry.

He said: "Authorisation will ensure master trusts - managing billions of pounds on behalf of millions of members – are strong, safe and deliver for workers.

"With record numbers saving for retirement, including millions through automatic enrolment, it’s vital to have the right protections in place across the board."

So far, only eight of the 52 workplace schemes in line for master trust authorisation have applied, with the deadline set for the end of March.

Fiona Matthews, managing director of LifeSight, said the provider was "thrilled to be blazing a trail for master trusts and receive this formal regulatory approval" of its work.

She added: "Being the first master trust to reach this landmark is a testament to the service we offer our members and clients, giving them the assurance that they are with the right provider.

"We expect that authorisation will give schemes that have been waiting and watching developments the confidence to make the switch to master trust."