IMPORTANT CHANGES TO AUTO ENROLMENT
RE-AUTHORISATION OF EXISTING MASTER TRUSTS
From 01/10/2018, the Pensions Regulator advised that all existing master trusts (a type of pension scheme arrangement) had 6 months to apply for authorisation in order to continue operating. That deadline was at the end of last month.
Master Trusts (if they have good reason) may extend this deadline up to 6 weeks, however, action still needs to be taken.
This link from the regulator explains more:
What is a Master Trust?
A master trust operates differently to a standard occupational pension scheme which manages its own funds and investments. A master trust holds its contract with the employer, not the employee. These arrangements became very popular due to their simplicity once Auto Enrolment was rolled out. Corpad are an example of a master trust arrangement.
What Do We Know Already?
Now Pensions have applied for a 6 week extension. Aviva, Scottish Widows, Peoples Pension and NEST are not affected by this review or have got the necessary authorisation.
How Could My Client Be Affected?
If a master trust is not seeking re-authorisation, they will look at transferring their members to another scheme.
This scheme may be on a worse charging structure which will disadvantage the employer and their staff.
This means you may have corporate clients who have an existing master trust as their pension scheme provider that can no longer operate. We will continue to update this page when we know more about the schemes affected. When we have a broader update, a further e-mail will be sent.
How Workplace Pensions Direct Can Help
Workplace Pensions Direct has a solution for any of your clients that either need an auto enrolment solution or have an existing solution but need to look at other arrangements. We have dealt with a large number of transfers away from providers such as Now Pensions and Salvus Master Trust.
Due to our size in the market, we have arranged special deals with a number of providers that are not available to other firms or general members of the public.
We will take over and manage the full transition including managing employee communications.
Please contact us to find out more on how we can help your clients.
As you know, contribution rates have now increased to 8%.
This is a significant increase and means now more than ever, your clients need to review whether their existing pension scheme is delivering the best value for your client and their staff.
Workplace Pensions Direct has acquired special deals with providers, such as Smart Pension with an exclusive AMC of 0.25%, that is much lower than the standard 0.75% AMC they currently offer.
Re-enrolment is another opportunity for clients to review their pension scheme arrangements.
Speak to us to find out more information.