2017 – year of the master trust? - hymans robertson ... · the rise of the master trust...
TRANSCRIPT
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Hymans Robertson LLP is authorised and regulated
by the Financial Conduct Authority
11January 2017
The rise of the Master Trust – what’s all the fuss about?
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Speakers
Lee HollingworthPartner and Head of DC
Hymans Robertson
Sharon BellinghamSenior Consultant and
Head of Provider Relations
Hymans Robertson
Louise SivyerMaster Trust Policy Manager
The Pensions Regulator
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What we’ll cover today
• The story so far
• Regulating Master Trusts
• Suitability and the provider market
• Selecting a provider
• Your questions?
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The story so far…
• Growth explosion of Master Trusts and why‒ DC came of age
‒ Impact of auto-enrolment
• Attractive alternative to contract based GPP’s
• But…‒ No barriers to entry
‒ Conflicts of interest
‒ High risk of provider failure
• Consolidation expected and welcomed
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Master Trusts: objectives
• To maximise compliance with AE
• To protect the benefits of pension scheme members
• To promote good administration
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Regulating Master Trusts now
Areas to explore What we doWho we speak to
• Sustainability
• Process for
discontinuation
• Governance
• Sponsoring
employer/founder
• Operations
• The trustee
• Analysis
• Risk assessment
• Further engagement
• Master trust
assurance framework
• DC standards, inc
chair’s statementsOutcomes sought
• Understand market and risks
• Share best practice, improve processes
• Control exits
• compliance with AE
• protect member pots, maintain confidence
• balance burden
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The Pension Schemes Bill - Authorisation
• Essential aim of bill to require master trusts to be authorised.
• Key criteria to be met‒ Fit and proper persons running schemes
‒ Financial sustainability and business plan
‒ Scheme funder requirements
‒ Robust systems and processes
‒ Adequate continuity strategy
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The Pension Schemes Bill – TPR supervision
• Authorisation process
• Ongoing supervisory engagement‒ submit documents eg accounts and business plans
‒ supervisory return
‒ whistle-blowing
‒ significant events
• Backstop for critical events‒ triggering events
‒ plans, pauses, powers of directions, fines
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The Pension Schemes Bill – planned timetable
Oct 2016 2018/19April 2017 2017/18
Bill introduced
Retrospective
provisions
Triggering
events
Restrictions on
charges
The Pension
Schemes Act
2017
New information
gathering powers
Increased
powers triggering
event periods
Regulations
Codes and
Guidance
12 month
transitional
period
Authorisation
starts
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DC Delivery
Unbundled
Trust
In-house Outsourced
Bundled
Contract(Group Pension Plan)
Trust
Employer Trust Master Trust
Overview of DC Delivery
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Suitability of Master Trusts
Benefits Considerations
• Readymade governance overlay
• Time and cost efficiencies of outsourcing to
one provider
• Efficient method of transferring existing
assets from a trust based scheme
• Bundled pricing approach can help reduce
employer spend
• Rich member experience – provision of tools
and other support/ guidance
• Full control is relinquished
• Inflexibility of some proposition
• Lack of pricing transparency
• Think about the sustainability of
the provider
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The Provider Market
Traditional pension
providers
Auto Enrolment
providers
“New Venture”
Master Trusts
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Provider Assessment
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Questions
Lee Hollingworth: [email protected], 020 7082 6324
Sharon Bellingham: [email protected], 0121 210 4309
This presentation remains the property of Hymans Robertson
and The Pensions Regulator. The content of these slides
should not be reproduced without express permission.