Pensions - Articles - NOW:Pension calls for Master Trust framework to be mandatory

 The voluntary assurance framework was introduced as a quality standard to enable trustees of master trusts to demonstrate high standards of scheme governance and administration and at the time of launch TPR said that it would consider moving to a more rigorous framework if take-up was poor.

  

 Research from Spence Johnson reveals that of the 5 million people that have been auto enrolled so far, 3.5 million are in a master trust arrangement.

  

 Morten Nilsson, CEO of NOW: Pensions said:

 “There are over 70 master trusts operating in the market but so far just three have undertaken the assurance framework with NEST a notable absentee.

  

 “These figures must be a disappointment for The Pensions Regulator and more needs to be done to incentivise participation.

  

 “At a minimum, TPR should publish a list of those master trusts with the assurance framework on its website and highlight this list to employers and advisers seeking high quality workplace pension schemes. As the size of companies staging decreases, it’s increasingly likely that firms will make their own provider selection without the help of an adviser. For these firms, being able to easily access a list of providers that have undertaken the assurance framework would be invaluable.

  

 “But, over the long-term, the DWP needs to think carefully about how standards in master trusts can be safeguarded and give genuine thought to making the framework mandatory. This would help to drive up standards, identify those master trusts that aren’t sustainable or fit for purpose and introduce much needed barriers to entry. Without this, there remains a serious risk of employers selecting sub-standard master trusts that will fail to stand the test of time.”