Pensions - Articles - Aegon responds to new master trust legislation


Kate Smith, head of pensions at Aegon comments: “We welcome the raft of measures set out in the Pensions Bill designed to bring the governance standards of all master trusts up to a consistent level, giving greater protection to members’ savings. New measures include ensuring that the scheme is financially secure, those running the scheme are fit and proper, systems and processes are sufficient and there’s a mechanism in place to protect members if the scheme withdraws from the market or fails.

 These measures, supported by new authorisation and intervention powers for the Pensions Regulator, will bring governance standards of master trusts much closer to contract-based regulatory standards which has to be good, not only for those employees saving in a master trust, but for the pension industry as a whole.
 
 “In future those setting up master trusts will need to prove they meet these standards, and existing master trusts will also need to comply with the new rules. This should give comfort to members that their pension savings will be protected including if their master trust winds up.
 
 “With reportedly around 100 master trusts, not all will be able to achieve the size they need to succeed, and some may decide the additional costs created by these standards are too great. This may drive consolidation in the coming year, with members being transferred into stronger schemes which meet the new standards.”
  

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