Aegon applies for master trust authorisation

Aegon has applied for master trust authorisation, the firm has revealed.

The provider submitted its request to The Pensions Regulator today to set up a master trust – a form of occupational pension scheme that provides money purchase benefits across multiple unconnected employers.

The master trust market has grown in the wake of auto-enrolment as employers looked for cheaper alternatives to single-employer trust-based schemes, but TPR now requires authorisation to ensure standards.

The factors involved in the decision include looking at business plans, financial sustainability, continuity strategy and how members’ benefits are protected.

Aegon acquired BlackRock’s defined contribution book in July last year, taking on a master trust structure as part of that.

It rebranded the proposition to the Aegon Master Trust, and now has £1bn in assets under management in a “growing part of Aegon’s workplace business”.

Aegon head of master trust Kate Smith says: “Working closely with the trustees, we’ve developed a high-quality authorisation submission. It’s taken a lot of time and commitment, reflecting the regulator’s desire to really understand how master trusts are operating and the governance they have in place as well as their plans for the future.

“We are confident that we will be authorised and look forward to further engagement with TPR. They’ve raised the bar for the master trust market and we welcome the initiative as it means greater protection for members of all master trusts, and will act as a driver to raise standards.

“This form of pension scheme has grown quickly in recent years and it’s only right that the regulator is examining the capabilities of providers to meet the needs of their members and ensure they’re able to support their long-term savings goals.”

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