Tighter master trust regulation “a must” as NOW: Pensions outlines five point plan

For immediate release: 18 May 2016

Workplace pension provider NOW: Pensions today welcomed the announcement in the Queen’s Speech that there will be a Pensions Bill in this Parliamentary session, which will address regulation of the mastertrust sector.

Morten Nilsson, CEO of NOW: Pensions said: “Over half of all pension schemes chosen by employers for auto enrolment have been master trusts. As a result, workers saving in master trusts represent the biggest group of savers in the pensions industry with around 6 million in a master trust arrangement.

Well run master trusts are ideal for the auto enrolment market as they enable even small employers to benefit from high standards of governance as the independent board of trustees that oversees the running of the scheme has a statutory duty to ensure that it is being run in the best interests of its members at all times. This means members have the comfort of knowing there is an independent body overseeing decisions on crucial issues such as charges, investment strategy and administration.

But, not all master trusts are the same, and with over 70 operating in the market, not all are going to prove sustainable over the long term. With no clear wind up process, disorderly exits could pose a real threat for savers and tighter regulation is a must.”

Five areas master trust regulation needs to address:

  1. Minimum market entry criteria including stringent tests to assess quality, governance and robustness of the business plan
  2. Qualified trustee body which is responsible for the oversight of the product to ensure that the best interests of the members are met
  3. A duty to maintain an up to date plan for the orderly wind up of their scheme and release of members’ funds to alternative pension vehicles
  4. Wind up plans to show where the finance will come from to pay for all the administrative costs of dispersing the trusts’ assets to new homes.
  5. A regulatory regime which is able to proactively spot inadequate behaviours and governance with teeth to enforce best practice.

-Ends-

For further information:

Lauren Roberts
Lansons
Tel: 0207 566 9760
laurenr@lansons.com 

NOW: Pensions www.nowpensions.com @nowpensions

NOW: Pensions is an independent, multi-employer trust serving thousands of employers and hundreds of thousands of employees from a wide range of sectors.

A subsidiary of one of Europe’s largest pension funds, Danish pension scheme ATP, NOW: Pensions offers a simple and cost effective workplace pension solution direct to employers and via advisers and the payroll sector.

In April 2013, NOW: Pensions became the first master trust to attain the NAPF’s new PQM Ready Standard. The benchmark shows employers that NOW: Pensions is a well governed pension scheme with low charges and good member communications.

In January 2015, NOW: Pensions achieved independent assurance of scheme quality in accordance with the new master trust assurance framework (AAF02/07) introduced by The Pensions Regulator (TPR) in conjunction with the Institute of Chartered Accountants in England and Wales (ICAEW).

The NOW: Pension Trustee Directors, whose role is to safeguard the interests of members, comprises well-known industry figures with different areas of expertise:

  • Jocelyn Blackwell, founding partner Dunnett Shaw
  • Christopher Daykin, former Government Actuary
  • John Monks, member of House of Lords and former General Secretary of ETUC and TUC
  • Win Robbins, former Head of European Fixed Income at Barclays Global Investors
  • Nigel Waterson, former Shadow Pensions Minister

Employee charges are just £1.50 per month administration charge (reduced administration charge of £0.30 – £1.00 to be applied during auto enrolment phasing for lower earners) plus a 0.3% annual product investment management charge, with no hidden charges.

NOW: Pensions has a good technical infrastructure combined with a pension product suitable for our team. We couldn’t be happier with NOW: Pensions.
Martin Woods, SALT.agency