Pitfalls when choosing a Master Trust

With Master Trusts expected to become the main vehicle for workplace pensions in the coming years, are you looking at your in-house pension or Group Personal Pension and thinking about other options?  One in three trust-based plans are expected to move to a Master Trust in the next 5 years and the transition has never been easier.  The Pensions Regulator’s new authorisation regime gives comfort that Master Trusts meet a minimum standard, but what should you look out for when selecting a Master Trust?


Making an assumption that technology will work seamlessly could leave you disappointed.  Payroll interfaces may not be compatible with your systems – ensure technology is demonstrated early on and tested during implementation.  And understand on-line member portals too.

The future of Master Trusts will undoubtedly be determined by the quality of their technology.  Technology can help you meet auto-enrolment requirements by removing the burden of monitoring enrolment and re-enrolment.  The quality of member portals and on-line tools is a key differentiator.

Many Master Trusts offer technology solutions that are effective, simple, and affordable for all employers.  Make sure you understand how the technology interfaces with your payroll processes and systems.


Governance models vary.  Consider the impact of governance on member outcomes and check that the Trustees are empowered to act quickly.

One appeal of moving from an in-house pension trust to a Master Trust is the removal of the governance burden. That said, as an employer you still want to ensure that your Master Trust will serve your employees well.

In a reliable governance model, Trustees should be empowered to challenge and make decisions quickly, particularly when replacing under-performing investment funds or addressing poor service.


Don’t underestimate the value of communications.  Employee understanding builds trust, leads to better engagement and delivers better member outcomes.

Communications offerings differ in the Master Trust market so question how your chosen Master Trust will engage with your employees.  Find out what tools and portals are available to help members understand the value of their pension throughout their journey to retirement.


Avoid selecting a Master Trust which may not have the scaleability to be around for the future.  Make sure you have a sustainable solution to avoid future disruption for you and your employees.

It’s a big Master Trust market out there, not all of the market will be around forever. Satisfy yourself that your chosen Master Trust has the scale to invest and compete into the future, so you don’t find yourself looking for a replacement.  Although switching will be possible, future-proofing is an advantage.


Take care not to be overly impressed by time-based SLAs.  Consider quality and the impact a member portal can have on speed and accuracy of key administration tasks.

Maybe it’s time to move away from time-based KPIs and think equally about quality? Understand whether your preferred Master Trust can provide you with quality assurances – does it seek feedback from members so that you can assess timeliness and quality?  Is there a member portal in place driving straight-through processing which could make time measurement meaningless?


Not all Master Trusts are suitable for all employers. One size doesn’t fit all. Determine your requirements before trying to source a Master Trust to ensure suitability for your workforce.

When selecting a Master Trust, spend time on your requirements. There are some 26 Master Trusts that have been authorised and are in theory available to any employer. But that doesn’t mean all of them are suitable for your employees. Some Master Trusts will offer complex investment options which financial-savvy workforces seek. But some of us just need a smaller range of simple investment options and a quality default investment strategy. Certain employers are happy to be more “hands-off” whereas others prefer more of an “in-house” approach. Do you know what you and your employees want for the long term?

Whilst avoiding these pitfalls will make for a smoother ride there are other things to look out for. The biggest contributor to member outcomes may be overall value for money but addressing these potential pitfalls will go some way to helping you build a successful long term partnership with your Master Trust provider.

Moving to a Master Trust is clearly a significant decision. Seeking some expert advice from a professional evaluation service with experience of the Master Trust market will help you tease out requirements and help to ask the right questions of potential providers.  

Contact Tina Oversby at GO if you’d like more information on how to select the best Master Trust for you.