The Pension Schemes 2017 Act introduces a formal definition of a ‘master trust’. Master trusts were greeted with mixed emotion into the pensions club five years ago but are now the backbone of defined contribution (DC) scheme provision.
As of today, a master trust is defined as an occupational pension scheme that:
• Provides money purchase benefits
• Is used by more than 1 employer
• Is not only used by connected employers
• Is not a public service scheme
Master trusts must also pass independent assurance that they are aligned with the standards set out in the DC code.
It could be argued that it would be a good thing for members if all occupational pension schemes were assured against the same set of standards, and many in the industry have been calling for exactly this. If it were implemented, this would effectively get rid of the different divisions of DC pension scheme provision.
It is now not long until we discover the much-awaited input from the regulators on the future of master trusts. BlueSky certainly believes that a level playing field for all pensions providers is the only sensible approach to ensure that members receive the best from their schemes, regardless of the provider. We will see what the regulators think.
CEO of BlueSky, Paul Bannister, discusses the issue, and the future plans for BlueSky.
By using a master trust, employers can cut pension administration costs, increase governance, and provide more flexible benefits options for members.
A report by professionalpensions.com showed that two thirds of individuals are automatically enrolled in master trusts in the UK thus showing how popular master trusts are have become.
BlueSky have been offering a master trust for over 30 years with a sound governance structure including a strategy team that excel in governance provision, to independent trustees, consolidation at a lower cost than a standalone scheme can typically achieve. We deal with all aspects of transition including support in winding up an existing scheme, and communicating with members through the process.
To learn more about how BlueSky can assist you, or to speak with a member of our expert team, get in touch today. Call us on 01322 308 249 or get in touch via our contact page.