As we approach the 31 March deadline for master trust authorisation applications, we are encouraged that many more providers have applied.
Some have admitted it is a challenging task, but that TPR is right to set a high bar.
The ability to apply for an extension is an essential part of authorisation, particularly in the context of a changing market.
Some master trusts are going through significant changes which will impact how schemes are run and therefore delay their application. Extensions are also important so schemes can avoid accidentally failing over a technicality.
When the legislation was being drawn up for the authorisation of master trust schemes, these scenarios were recognised and the opportunity to apply for an extension was written into the law.
Any extension application must contain a good reason for us to grant the extension. It is not a foregone conclusion that an extension will be granted. You can expect us to challenge trustees on why they need more time.
We have granted 11 extensions to date. An additional 9 schemes have applied for authorisation since we last published master trust market figures, bringing the total number of applications so far to 22.
There are two main reasons why schemes apply for extensions. The first, and a common reason, is a key change to a scheme, such as a new owner, administrator or trustee.
The second reason is because we are encouraging those filing authorisation applications in the last two weeks of March to also apply for an extension. We are keen that schemes file the best possible application for authorisation, and this ensures that schemes can send us any additional information which we may ask for after the 31 March deadline.
To put this in some context, applications we have received so far have included up to 872 documents and checks on up to 115 people involved in the running of the scheme to make sure they are fit and proper. Rejecting an application because of a missing piece of paperwork is clearly not in the interests of a master trust or its customers – both members saving for their retirement and employers fulfilling their automatic enrolment duties.
We have seen a late surge in applications, which we have planned for and we have the resources we need. The coming months will be busy for us but we have a well resourced and dedicated team which is absolutely ready to assess these applications within our expected timeframes, to ensure all master trusts meet the required standards.
We are excited to know that by the end of the year there will be a market of authorised master trusts which will provide better protection for the almost 14 million people saving for their pensions in these schemes.
By Kim Brown
Head of Master Trust Authorisation and Supervision