The Pensions Regulator (TPR) has granted a number of extensions for master trust applications following a late surge in requests and has encouraged remaining players to check their application before submitting.
With 10 days remaining before the application deadline, TPR has granted 11 extensions on applications now totalling 22.
In a blog posted today (March 21), Kim Brown, head of Master Trust Authorisation and Supervision at The Pensions Regulator, cited changes at the schemes as one of the main reasons.
Ms Brown added TPR was actively encouraging those applying in the final two weeks of March to apply for an extension to ensure all applications are the best they can be.
She said: "To put this in some context, applications we have received so far have included up to 872 documents and checks on up to 115 people involved in the running of the scheme to make sure they are fit and proper.
"Rejecting an application because of a missing piece of paperwork is clearly not in the interests of a master trust or its customers – both members saving for their retirement and employers fulfilling their automatic enrolment duties.
"We have seen a late surge in applications, which we have planned for and we have the resources we need. The coming months will be busy for us but we have a well resourced and dedicated team which is absolutely ready to assess these applications within our expected timeframes, to ensure all master trusts meet the required standards."
Under the new registration process, master trusts will have to hold enough capital to cover the cost of a worst-case scenario, such as the cost of transferring their members to another scheme or of winding up, without charging members.
The government and the regulator have been discussing these rules since 2016 and have been expecting them to drive consolidation in the market.
An extension for authorisation can be granted by TPR with good reason, such as changes that would impact the running of a scheme. However, Ms Brown cautioned that any extension "is not a foregone conclusion".
She said: "The ability to apply for an extension is an essential part of authorisation, particularly in the context of a changing market.
"Some master trusts are going through significant changes which will impact how schemes are run and therefore delay their application. Extensions are also important so schemes can avoid accidentally failing over a technicality.
"When the legislation was being drawn up for the authorisation of master trust schemes, these scenarios were recognised and the opportunity to apply for an extension was written into the law."
Steve Webb, director of policy at Royal London, said: "The logjam of applications for master trust authorisation was entirely predictable.
"Some master trusts are talking about submitting a thousand pages of information to accompany their application, and The Pensions Regulator has no chance of doing justice to all of this paperwork over the next few weeks.
"To make sure that the job is done properly it makes sense to spread out the outstanding authorisations and not to insist on an arbitrary deadline."
