The authorisation programme initiative by The Pensions Regulator follows a period of significant growth in the master trust market. Many trusts were initially established to service the large number of employees now saving for retirement through auto enrolment. Master trusts have become the preference for many employers as they seek to move away from the costs of providing single-employer trust-based schemes while retaining a similar level of governance.
Authorisation will raise master trust standards in a fast growing area of the workplace pension market by a thorough examination of scheme’s capabilities in areas such as their systems and processes and financial sustainability. In future all master trusts will need to have business plans, continuity strategies and access to ring-fenced assets to protect members’ benefits should a trust be wound up.
Aegon’s master trust was acquired as part of the acquisition of BlackRock’s Defined Contribution business which also came with Own Trust and Investment Only capabilities. The master trust formally became Aegon Master Trust (AMT) in July 2018 and is a growing part Aegon’s workplace business. In February total assets under management (AUM) in the Aegon Master Trust reached £1bn.
Kate Smith, Head of Master Trust at Aegon UK is responsible for leading the development of Aegon’s master trust proposition including the authorisation process.
She said: “Working closely with the Trustees, we’ve developed a high quality authorisation submission. It’s taken a lot of time and commitment, reflecting the regulator’s desire to really understand how master trusts are operating and the governance they have in place as well as their plans for the future.
“We are confident that we will be authorised and look forward to further engagement with The Pensions Regulator. They’ve raised the bar for the master trust market and we welcome the initiative as it means greater protection for members of all master trusts, and will act as a driver to raise standards. This form of pension scheme has grown quickly in recent years and it’s only right that the regulator is examining the capabilities of providers to meet the needs of their members and ensure they’re able to support their long term savings goals.”
Ian Pittaway, Chair of Aegon Master Trust said: “Master Trusts are going to be a long term feature of the pension scene in the UK, providing benefits for many members. The Trustees of the Aegon Master Trust welcome the new authorisation regime as it will create a robust, and improved, framework to facilitate better outcomes for members.”
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