The new master trust regulations are good news for members. But with authorisation costing £41,000 (for existing trusts) and the process taking up more time and resource, we’re expecting more trust-based schemes to consolidate.
Talk to us about master trust consolidation
You can email us at: email@example.com
Or call us on: 01293 586637
Why consolidate with The People’s Pension?
The People’s Pension was the first to achieve master trust assurance for scheme quality. It’s a flexible, portable workplace pension designed for people, not profit. So, we’re completely focused on members’ needs and use the money we make to benefit them.
We have proven experience in consolidation – take our master trust merger with Your Workplace Pension, which saw almost £20m in funds under management and nearly 9,000 members transfer to us.
Master trust authorisation resources
Our 6 top tips for successful consolidation to a master trust
1. Make sure everyone’s on the same page
Consolidation often involves multiple stakeholders, namely scheme founders, advisers, employers, third party administrators, lawyers and trustees. So it’s important to make sure everyone is clear on what’s happening, when and why.
2. Have a realistic timeline with a project plan
The consolidation process can take time, so it’s wise to plan ahead. Have regular meetings with stakeholders, and manage expectations. Have one person who oversees the process from start to finish and stick to an agreed timeline.
3. Discuss and agree criteria and priorities
What makes a good master trust – strong governance, lower operational costs, a range of investment and retirement options…? Discuss and agree this with your clients so that they can choose a master trust that meets everyone’s expectations, especially trustees’.
4. Check the scheme governance is up to scratch
Before selecting a scheme, check there’s strong governance in place and that the business strategies meet expectations and are in the members’ best interests.
Also, review their scheme rules to ensure legal requirements are met eg discharging trustees.
5. Review the terms and process for data transfer
Lots of data will be transferred to the ‘new’ master trust. It’s important to think about the terms and process for this and ongoing arrangements for data processing and security.
Here’s a pre-consolidation checklist for you and your clients:
- Ensure there’s a robust process for cleansing data and check that contact details (especially for deferred members) are up to date.
Review your scheme rules to see if members’ consent is needed to transfer.
- If members have any rights or protections (eg lifetime allowance protections or scheme-specific lump sum rights) they’ll need reassurance that these won’t be lost because of the transfer.
- Tell members about the transfer – consultation must take place for schemes with over 50 members.
- Make sure the systems and security of the master trust you’re transferring to will adequately manage and protect members’ data.
6. Next Steps
If you are advising a master trust scheme where achieving authorisation is a concern, contacting other providers now to explore options may make sense.
Or if you are concerned over any master trusts your employer clients use, you could help them decide if moving to another provider is right and help them to plan at a time that suits them.
Consolidate with The People’s Pension
For more information, email: firstname.lastname@example.org
Or call us on: 01293 586637