Salvus Master Trust has been authorised by The Pensions Regulator, the final existing master trust to make it through the process.
The FCA Pension Plan also received authorisation today, bringing the total number of authorised schemes to 37.
The market has since reduced in size by nearly 60 per cent, from 90 schemes. The application for one existing scheme which applied for authorisation – Supertrust UK – was withdrawn.
To see detailed performance statistics for more than 30 of the biggest authorised master trust and GPP defaults, go to www.capa-data.com. For risk/return data click here.
To gain authorisation schemes have proved to the regulator they are run by fit and proper people, have sufficient financial reserves, and robust plans and systems in place.
TPR executive director of frontline regulation Nicola Parish says: “These tough new requirements better protect the 16 million pension pots in master trust schemes, which people will rely on in their retirements.
“More than 50 schemes leaving the market shows that these laws are demanding – and rightly so. It is right that people saving for their retirement should be in a scheme which adequately protects their pension pots and which they can have confidence in.
“The 37 authorised master trust schemes will continue to be closely supervised by us to make sure they continue to operate within the law.
“We will also expect them to set an example for the rest of the pensions industry – to have their data in shape ready for the Pensions Dashboards, to be at the forefront of considering climate change in their investments and ensuring that savers are getting value from their pensions.”
All authorised master trusts will be supervised, with a higher intensity of supervision for those schemes presenting a higher risk to members, including due to their size, complexities and TPR’s previous interactions with a scheme.
As part of supervision all master trusts will have to submit documents regularly to TPR, including an annual supervisory return. TPR will run periodic scheme evaluations against the authorisation criteria, closely monitor the market and meet with schemes at a frequency dictated by their intensity of supervision.
New master trusts setting up in the market will have to be authorised by TPR before opening for business. If authorised, these new models will be intensely supervised in the first years of business to ensure they comply with the law. One application from a new master trust has been received and is being assessed.
Salvus, the last of the existing schemes to make it through authorisation, has £200m of funds under management and launched a member engagement app this year.
Roger Mattingly, chairman of the trustees of Salvus Master Trust says: “The master trust authorisation process is an essential way of ensuring schemes have the robust governance and protocols in place needed to secure the best possible outcomes for members. Successfully completing the process is reflective of the Salvus Master Trust’s ongoing commitment to the market and we look forward to being part of it as it continues to evolve.”
Goddard Perry Consulting CEO Steve Goddard says: “Quite rightly, The Pensions Regulator set the bar for authorisation very high in order to protect member interests. Being granted authorised status demonstrates that our systems, processes, financials and people are all of the highest quality.”