Legal & General's (L&G) two master trusts have been authorised, four months after they submitted their applications.
The separate net-pay and relief-at-source versions of the L&G WorkSave Mastertrust become the second and third master trusts to be granted approval to continue operating last Friday (29 March).
The announcement today (2 April) comes as 22 further master trusts await responses to their authorisation applications, according to PP analysis.
Speaking to PP, L&G Investment Management head of defined contribution Emma Douglas, who also acts as the schemes' strategist, said the process had been "rigorous" but she was "extremely pleased" with the outcome.
Douglas said, across the two applications, the "mammoth task" had led to around 3,000 pages being submitted and that the regulator had asked a "lot of very detailed questions".
The scheme had participated in the voluntary readiness review exercise last year, but Douglas said it "didn't prepare us entirely for the full weight of what you need to do for that full application".
"The real exam was a lot harder than these mock exams," she added.
In total, at the end of 2018, the master trusts managed around £5.7bn of assets for 830,000 members and over 90 participating employers.
"This is a fabulous milestone but it's just passing the exam. You've got to go on and work hard after you've done that. We can have a few moments of celebration - some glasses will definitely be raised - but after that it's making sure we've got the right default options, looking at member communications… and also a focus on broader wellbeing."
Now L&G is preparing to further improve its service to members, with an aim to roll out video benefit statements more widely.
"They've worked really well in terms of getting engagement from individuals," Douglas continued. "There's nothing like watching a two-minute video about your pension and what would happen if you paid in a little bit more, as opposed to reading a paper benefit statement. Not everyone even opens it when it comes through the door. We find that video has really got through when it comes to communication."
L&G recently introduced a "much more DC-friendly ESG default option", covering a wider range of asset classes, and is considering the retirement income targets idea pioneered by the Pensions and Lifetime Savings Association.
However, the provider is not currently in talks to consolidate more master trusts; Douglas noted its strategy is "organic growth".
"There's enough opportunities in the market at the moment, particularly as unbundled trust-based schemes are looking to bundle quite often under a master trust," she continued.
"The market itself is very vibrant so we're finding that, actually, we can be pitching for schemes that in themselves are probably about as big as some of the smaller master trusts that aren't going to go through that authorisation process."
The official deadline for submitting applications was 31 March, although at least 11 schemes were granted extensions of up to six weeks, including Now Pensions. The market will shrink by nearly half as some 40 schemes have confirmed they will exit or trigger their exit.
Willis Towers Watson's master trust, LifeSight, was both the first to apply and the first to be authorised, receiving its stamp of approval in February.
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Professional Pensions has compiled a list charting the progress of master trust authorisation. View our list in full here...
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