Master trusts are becoming increasingly popular with automatic enrolment and cost pressures pushing employers to seek out the most practical solutions.

We act for a wide range of master trusts and are familiar with their particular design and governance issues. We also advise employers and trustees on transferring into master trusts. So, whether you are considering setting up a master trust or transferring into one, we can advise on the legal requirements, the statutory minimum governance standards applicable and the master trust authorisation framework. We can also help with changes to investment strategies, in particular switching exercises, managing conflicts of interest between the trustees and the provider, and investment options (including the default).

We monitor developments in the master trust arena closely and liaise directly with TPR on areas of concern to our clients, such as the new supervision regime and how it will work in practice. Our DC experts also sit on various industry groups and can share their insights with clients.

Read our latest quarterly bulletin which sets out current and future developments affecting master trusts, so you can check what should be on your agenda: Master trust agenda – Q1 2022

Recent experience

• Providing varying levels of support on authorisation projects – ranging from high level commentary on the legal requirements for schemes’ authorisation applications through to detailed advice of all aspects of the fit and proper, systems and processes and reserving requirements
• Supporting schemes in the authorisation process where either TPR’s preliminary conclusion was not to recommend the scheme for authorisation to the Determinations Panel or the Determinations Panel raised issues of concern
• Preparing legal documentation in respect of reserving arrangements agreed by master trusts with their provider
• Advising on scheme funder issues and amendments to the Trust Deed and Rules
• Assisting authorised schemes with preparing for supervision
• Advising in relation to significant events
• Advising on the roles and responsibilities of the master trust trustees, scheme strategists and scheme funders in light of the new supervision requirements
• Preparing policies and other governance documentation required for authorisation and supervision, ranging from high level policies to detailed and bespoke documentation
• Offering bespoke trustee training and steering trustees through changes to scheme policy and legal obligations more generally
• Advising on statutory governance statements
• Assisting master trust clients on dealing with other aspects of TPR action
• Assisting master trusts that did not wish to seek authorisation on exiting the market both under the new master trust supervisory regime and the regime which existed before it came into force
• Advising on bulk transfers into master trusts, both from the transferring scheme and master trust perspective.

We have also spent time advising clients on a broader spectrum of issues, obstacles and challenges, including:

• Developing an insurer’s new master trust, including drafting the Trust Deed and Rules, providing ongoing advice to the trustee of the master trust including on bulk transfers-in, and meeting ongoing governance requirements
• Acting for the sponsor on drafting the initial documentation for their master trust
• Advising clients considering entering the market on key issues, requirements and risks
• Converting an industry-wide DC scheme (with several hundred participating employers) into a master trust, design of the benefit structure, scheme rule changes and member communications
• Integration of an occupational scheme in the higher education sector with a master trust benefit section from a provider to create hybrid future service accrual
• Advising providers on the establishment of new master trust arrangements and the legislation applicable to workplace pension arrangements
• Advising both employers and trustees on the issues to consider when deciding whether to join master trust arrangements.
• Integrating an occupational scheme in the higher education sector with a master trust benefits section from a provider to create hybrid future service accrual
• Advising trustees of DC schemes on the potential winding up and bulk transfer of entire schemes and entire DC sections to master trusts
• Advising employers on their ongoing duties and obligations when participating in a master trust.