As we begin taking a hard look at our Master Trusts, it is vital to really understand the foundation that the scheme sits on. It is important to consider what is supporting the running of the scheme, whether it be the day to day administration, its systems and processes, or the financial backing of the scheme.
We take a closer look at each of these foundations, to ensure the best possible application process:
Systems & Processes
Providers will likely have reviewed their systems and processes as part of the Master Trust Assurance Framework; an independently audited accreditation, which a number of Master Trusts have already obtained.
This framework is a big plus and will tick a number of boxes for The Pensions Regulator, as the deep-dive into quality, trust and governance commences.
You may, like us, therefore decide to continue the Master Trust Assurance Framework throughout the application process, ensuring and proving that all that we do is robustly checked.
If, however, you are not undergoing this process, it is more important than ever that you review your systems and processes, ensuring that they are fully documented, risk assessed and that any complaints have been cross checked and are water-tight.
The next important area to consider is the financial sustainability of your Master Trust. Trustees should have already begun considering what money is available to keep the scheme running for the long-term. It’s important not to review this in terms of year to year, or based on projections, but on what you currently have. Can your scheme operate over the next 5-8 years, as it currently is?
Finally, consider your scheme funder. If things begin to decline, from where will the money be sourced? Evaluate the strengths of your scheme funder and consider their business plan. It is vital that trustees are seen to be looking to their funder, so gathering evidence here is crucial.
With each of these three boxes ticked, you’ll have gone a long way in ensuring a strong, stable foundation on which your scheme can proudly sit, proving to The Pensions Regulator that you have a long-term and sustainable prospect.
Watch the video as Director of Operations, Jessica Rigby, discusses the importance of securing this foundation in greater detail. Is your Master Trust ready?