The Pensions Regulator (TPR) has launched a consultation into the draft policy that will supervise and regulate master trust pension schemes once master trust authorisation is introduced from October 2018.
As of October, master trust schemes will have six months to apply to TPR to be able to continue operating in the pensions market. Those schemes that receive authorisation will then be supervised by TPR on an ongoing basis, to ensure that they continue to meet the authorisation criteria and maintain other relevant legislation and codes of practice.
The consultation, outlined in the Supervision and enforcement policy for master trusts document, will run until 23 August 2018. The document details TPR’s more proactive stance around supervision and enforcement action, which aligns with its new risk-based approach to overseeing all types of pension schemes. This is being developed as part of the TPR Future Change programme.
The consultation sets out how TPR will engage with master trusts throughout supervision, including highlighting the key activities it expects trustees and others to carry out. The consultation also demonstrates how TPR aims to use its powers in cases of non-compliance, such as enforcement actions or withdrawing authorisation. TPR also plans to more intensively scrutinise higher-risk master trust schemes.
The consultation is seeking views from pension scheme trustees, scheme funders, scheme strategists, service providers, employers, professional advisers and members of master trusts.
Kim Brown, head of master trust authorisation and supervision at TPR, said: “Authorisation will create a market with better safeguards. To do that, we need to set the standards which every master trust must meet to operate once they have been authorised, or set up in the market. We will also supervise these schemes to ensure that they continue to meet the authorisation criteria, are well-run and offer good value for members.
“Our policy outlines how we will be collaborative in supervising schemes, but tough to use our powers, including de-authorising schemes, if they drop below the standards outlined in legislation.”