It is no surprise that considerable emphasis on governance standards and regulatory expectations have continued to be a focus in the minds of those responsible for running master trust pension schemes. Having been taken through a rigorous authorisation process, trustees and their advisers will have considered the suitability of their governance arrangements.
This has been a significant period of change for master trusts and their sponsors, resulting in questions around the fitness and propriety of internal controls relevant to systems and processes. Robust liaison with service providers and internal analysis of procedures will have unearthed areas where improvements are needed, with an emphasis on protecting and acting in the best interests of members.
Trustees should not simply consider this exercise as a compliance duty. The overarching objective should be to seek continual improvement and efficiencies, to the extent that standards of governance are embedded within the culture of a master trust.
The requirements to have ongoing supervision, a plethora of documents and a narrative supporting supervisory returns will focus minds, but most important is what defines a well-run scheme; views on this will vary, and understandably so.
At the heart of the matter will inevitably be the question of what good governance looks like, and how it can be delivered in a cost-effective manner. The Pensions Regulator (TPR) has emphasised the importance of schemes providing good value for members; this needs to be matched with cost-effective standards of governance.
Form filling and an abundance of policies and documented procedures is not necessarily the answer. It is the effective operationalisation of governance that is key, alongside ongoing monitoring that provides a platform for quality service and delivery.
Phil Spary is a member of the Master Trust Working Group at the Pensions Research Accountants Group and a member of the Master Trust Assurance Working Group at the Institute of Chartered Accountants in England and Wales.