New Requirements For Master Trusts - DWP Introduces Authorisation Process For All Schemes

The Department for Work and Pensions has introduced a programme of reform to overhaul the regulation of Master Trust schemes, with a key part of these new requirements upon trustees for authorisation. Under the new rules, if schemes do not apply for authorisation, or do not meet the below criteria, they will be required to transfer their members to another scheme and wind-up. A supervisory regime is also implemented under these reforms, which will ensure Master Trusts continue to meet all authorisation criteria, and remain viable.

Since the introduction of auto-enrolment requirements in 2008, the use of Master Trusts has evolved to become a popular market approach to DC pension schemes. These trusts are occupational pension schemes used by multiple unconnected employers, and provide money purchase benefits. Master Trusts now make up 35% of workplace pension schemes (the Pensions Regulator, 2016), but while their share of the market is only currently £20bn, it is