Master Trust Trustee

The new kids on the pensions block are the master trusts, that have sprung up in the hope of grabbing a slice of the workplace pensions, auto-enrolment business.

This statement is only partly true: master trusts have existed for a long time, providing an occupational pension scheme solution to companies that are not connected. They have risen to prominence as a result of the requirement for employers to have a pension scheme into which they must automatically enrol eligible employees. These master trusts offer a convenient, low cost, solution.

Master trusts are usually defined contribution occupational pension schemes governed by board of trustees. The main challenge for these trustees is to ensure that the contributions paid by members and their employers are paid on time and invested promptly and accurately. The design of the default investment fund is also a challenge: the strategy must meet the needs of a diverse range of members with different appetites to risk and conflicting end point objectives.

The authorisation process implemented by the Pensions Regulator is designed to ensure that all master trusts are financially secure and have systems in place that are up to the task of governing the scheme at the highest level. This has caused a shakeout of sub-optimal master trusts, and consolidation in the master trust market.

Able Governance has been involved in the master trust market at every stage in the journey - from inception of new schemes, to an ongoing state and to wind up, including extensive interaction with the Regulator. This experience is unusual in the independent trustee market, and we would be happy to discuss your situation if you are a master trust at any of these stages and looking to strengthen your governance proposition.