Master Trusts up and running

Master Trust pensions have grown significantly in popularity since the roll-out of auto enrolment and are expected to continue to do so.  From 1 October 2018, all new Master Trusts have had to obtain authorisation from The Pensions Regulator (TPR) before being able to operate.

There is now a clearly identifiable pool of 37[1] Defined Contribution authorised Master Trusts.  However, although authorisation requirements are a very positive move for the industry, not all Master Trusts are equal.  With different approaches to governance, administration and investments, it can be challenging to identify the best one for your employees / members. The graph below illustrates the start point – working out which Master Trust might be available for your needs:

Categories are as defined by GO Group and do not represent an official industry categorisation

Of the 37 authorised Master Trusts, only 29 are commercial Master Trusts – that is to say, available to any employers meeting the Trust’s eligibility criteria. The remainder only admit employers from a particular employer group, industry, or with a particular connection to one another.

GO Insight

Something we’ve noticed is that many employers are choosing their Master Trust from a drop down list within payroll applications.  This meets a regulatory need but bypasses a robust governance approach – it is effectively a short term decision with long term consequences.

Thankfully, it is possible and viable to change Master Trusts.  So, any quick decisions made for short term compliance can be modified over time to a better business fit.  Contact Tina Oversby at Go if you’d like more details on Master Trusts.

[1]The BlueSky Master Trust was wound up and transferred to the Crystal Trust in January 2020