Is now the time for regulation of the master trust market? Helen Morrissey hopes so.
The master trust market has grown massively in recent years, with some estimating there could be up to 100 providers in the market. While this means employers are certainly spoilt for choice, it also highlights the issue of how appropriate due diligence can be done on such a vast array of providers.
The situation has led some to speculate on the need for more robust regulation in this area. It was brought up when Secretary of State for Work and Pensions Stephen Crabb appeared before the Work and Pensions Committee last week.
One member urged Crabb to look at the issue to deal "with distinct concerns that in 20 years' time we will have people coming here asking government to do something because a master trust has failed."
The voluntary nature of the MAF means there are many providers who cannot display such high levels of governance and this is an issue that must be addressed.
Crabb did not seem overly concerned and replied that while issues may exist "around the edges" of the market, more than 90% of members are with Master Trust Assurance Framework (MAF) accredited providers.
While this is great news for those using such providers, the voluntary nature of the MAF means there are many providers who cannot display such high levels of governance and this is an issue that must be addressed.
It is to be hoped that we will see the inclusion of a pensions bill in this week's Queen's Speech to open the door for master trust regulation. This may seem strange in an industry already over-burdened with regulation but I fear that if this does not happen we put the retirement savings of many thousands of people in danger.
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