The intention of the government to increase the scrutiny of master trusts through fresh legislation has been championed by a number of industry players.
Xafinity's National Pension Trust, the People's Pension, Sackers, Scottish Widows and RSM all praised the government's aim which was revealed on 23 February.
The proliferation of master trusts over the last few years has demanded attention from The Pensions Regulator (TPR) and policymakers to ensure they were safe for members and employers.
Xafinity head of defined contribution (DC) solutions Ken Anderson called on the master trust assurance framework (MAF) to become mandatory. "To protect members and employers, it is important that an up-to-date, central list of high quality master trusts is maintained," he said.
"The list needs to include those that comply with the MAF and remove those that do not continue to adhere to the strict controls. TPR does not appear to have updated its own list of the master trusts that comply with the MAF since October 2015. This means that employers have to rely on searching the market themselves which is not ideal."
The demand for more guidance from TPR was echoed by The People's Pension director of policy and marketing Darren Philp (pictured above). "In order to truly protect consumers and their savings, TPR needs to be given more powers to regulate master trusts in order to stamp out these minority schemes," he said.
Scottish Widows head of industry development Peter Glancy pointed out master trusts were not subject to the same scrutiny as other pension arrangements. "Master trusts are not supervised by the Financial Conduct Authority (FCA) and this regulatory gap means that many people will be exposed. Traditional pension providers are also supervised by the Prudential Regulatory Authority (PRA) which sits within the Bank of England," he said.
Ensuring safe master trusts was tied to the success of automatic enrolment. "The last thing anyone needs at this stage in the development of the auto-enrolment market is for a big scandal which would undermine confidence in the system and the real progress which has been achieved to date," said RSM's head of pensions Ian Bell.
The voluntary MAF framework was developed by TPR and The Institute of Chartered Accountants in England and Wales (ICAEW) with the aim of enabling trustees of master trusts to prove to employers that their scheme is managed to a high standard.
A spokesperson for TPR said: "We believe that large well run master trusts which have obtained Master Trust Assurance (MTA) and group personal pension plans (GPPs) authorised by the FCA, are a good choice for employers seeking to comply with their automatic enrolment duties.
"We have published a list of master trusts which have obtained MTA and are open to all employers on our website.
"We expect schemes applying to appear on the list to meet the standards set out in our guidance, including having clear, accurate and prominent messages regarding tax relief in member communications, before we will add them to the list."
The People's Pension, Willis Towers Watson's Lifesight, National Pension Trust, Welplan Pensions, National Employment Savings Trust (NEST) and SEI's master trust have received MAF accreditation.
For a full list of master trusts click here.
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