The National Association of Pension Funds (NAPF) has submitted its formal response to the ICAEW’s consultation on assurance reporting on master trusts.
Joanne Segars, NAPF Chief Executive, said:
“We have already welcomed The Pension Regulator’s and audit profession's focus on improving the quality of master trusts, and we launched the Pension Quality Mark READY to support this.
“However, our consultation response sets out our master trust members’ concerns about the resources the assurance audits will require and the lack of auditors with pensions expertise to carry them out. This risks even higher costs, as the audit will be difficult and time consuming.
“The timing is wrong, too. This work will hit master trusts just as they are hitting the peak demand from employers because of automatic enrolment. We urge the ICAEW and The Pensions Regulator to reconsider implementation deadlines, along with the length and number of control objectives. We believe a shorter framework targeted at the key issues would be more efficient and could be built upon later.
“The most important thing is to encourage good master trusts and ensure action is taken against poorly-run ones. We fear this voluntary audit framework risks creating extra burdens without solving the underlying problem of poor regulation. We want to see a single regulator, a greater focus on ensuring strong, independent governance and higher barriers to entry."
The NAPF response sets out its members’ concerns over several of the 43 proposed control objectives, including their prescriptive nature, how they will remain relevant in a changing policy environment, and a lack of clarity in some cases about expectations or requirements.
The Pension Quality Mark READY helps employers identify master trusts with strong, independent governance; low charges; and engaging member communications. Six schemes have already gained PQM READY status: Legal & General Master Trust; National Pension Trust; NOW Pensions Trust; The Pensions Trust; The People’s Pension; and Railways Pension Scheme.
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