The Pensions Regulator denied it has set the bar ‘too low’ after authorising 33 out of the 38 master trusts that have applied for authorisation.
Speaking at the Corporate Adviser Summit, Nick Phillips, lead specialist at TPR’s master trust authorisation and supervision team pointed out that many schemes had been forced to improve their governance, and now met minimum standards which they did not before.
He pointed out that six months previously — after only one trust had received authorisation — he had been asked whether the regulator had set the bar too high, with a number of trusts requesting an extension in order to get the appropriate documentation to TPR.
With the authorisation process almost completed, Phillips outlined to the delegates the key learnings the regulator had taken from this process. On the positive side, he said TPR had been pleased that many schemes had taken on board feedback from the readiness review. He said this part of the process had helped both the regulator and individual schemes prepare for such a significant regulatory change.
He added: “Schemes have been open on the issue of engagement with us. We have learned a lot about the different financial models operating in the market and this valuable information will help with future supervision of this market.”
On a more negative note, Phillips said the regulator had been disappointed that there had often been key documents missing from authorisation submissions, which meant the regulator had to chase providers for this information.
Looking forward Phillips said that by the end of the year this would be a fully authorised market. He confirmed that TPR would take a risk-based approach to supervision, with newer entrants into the market, those deemed higher risk facing more intense supervision.
Phillips said he encouraged master trusts to be “open, honest and transparent with us”. The regulator, he said, wanted to be pro-active in assessing and supervising risk and build relationships with schemes going forward.