Work and Pensions committee chair Frank Field has called on Chancellor George Osborne to introduce new legislation to tackle “unstable master trusts”.
In a letter to the Chancellor last week, Field noted the parliamentary committee’s concerns on both master trusts and the effectiveness of The Pensions Regulator.
In particular, Field noted that the committee had heard concerns about the ability of the regulator to monitor the introduction of potentially unstable master trusts in the savings market.
He said: “The Minister for Pensions told us in March that she had been pressing colleagues in Government for a Pensions Bill. The DWP confirmed that is has undertaken the necessary preparations for legislation.”
“Might you therefore consider please lending your support to the inclusion of a Pensions Bill in the forthcoming Queen’s Speech?”
It comes as the Work and Pensions Committee launches its inquiry into the Pensions Protection Fund, and pensions regulation, which will use the collapsed British retailer BHS as a case study.
However, Salvus Master Trust managing director Graham Peacock says TPR’s proposals do not go far enough.
He says: “While we welcome any effort by The Pensions Regulator to raise standards and viability of master trusts, in this instance, it is using an incredibly blunt tool to do so. Capital adequacy is prudent when setting up any business but doing this across the board risks lulling both the regulator and the consumers into a false sense of security.
“In all likelihood, by the time the regulator learns of a firm that has breached its requirements, it will be too late to save it – that particular horse will have bolted. Therefore, these proposed new measures are unlikely to be able to offer enough protection to either members or to master trusts themselves.”
In February Money Marketing revealed pensions minister Ros Altmann’s concerns over the proliferation of master trusts. She said savers faced “unacceptable risks”.