Master trusts have until 31 March to either apply for authorisation or trigger their exit from the market. After that date, master trusts which fail to either apply or trigger their exit will be breaking the law.
TPR has now launched a step-by-step guide for schemes to check if they are a master trust as some may not know they fall within the definition. They should use the guide to help them decide what action to take, including seeking further advice.
Nicola Parish, Executive Director for Frontline Regulation at TPR, said: “It is the law that, from April 2019, any master trust schemes operating without authorisation will have to close and transfer members to another master trust. It’s really important that scheme trustees use our guide and seek additional advice if they need to, or they could find themselves being forced to wind up in four months’ time.
“From April 2019, for schemes which already exist in the market and haven’t applied for authorisation, there is no appeal process, no opportunity to file an application - no other option than to wind up. We have been working with schemes we think meet the definition of a master trust, but trustees will always know their structure best, and it is their responsibility to check whether their scheme is a master trust.”
Any defined contribution scheme providing pensions for multiple and unconnected employers may be a master trust, and trustees should seek legal advice if they think their scheme falls under the definition.
Ninety master trusts have been identified in the market. One has submitted its application, three have exited and 32 have triggered their exit, leaving 54 which either need to apply or trigger their exit in the next four months.
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