Pensions - Articles - Aegon supports proportionate master trust legislation

 • Work and Pensions Secretary hints there may be master trust legislation included in the Queen’s Speech
 • With low entry barriers, 70 master trusts looking to benefit from automatic enrolment have been launched
 • Concerns that some master trusts are too small and lack sufficient resource to succeed
 • All master trusts and contract-based schemes should be required to meet common quality and sustainability standards
  

 “To be financially stable and offer value for money, a master trust needs to grow quickly to cover its costs. Low entry barriers mean that anyone can set up a master trust and this has resulted in over 70 UK master trusts, making it unlikely all will achieve the scale to be sustainable. The fear is that on wind up, if the scheme’s provider has insufficient funds to cover costs, these costs might be taken from the members’ funds wiping out their pension savings, through no fault of their own. This could undermine confidence in the UK’s pension system and contaminate the Government’s flagship automatic enrolment policy. To protect members we welcome proportionate legislation to set prudential and governance common standards across all master trusts, bringing them in line with contract-based schemes.”