Friends Life has launched a pensions master trust in response to growing scrutiny of the governance arrangements offered by schemes used for automatic enrolment.
The Department for Work and Pensions is currently consulting on proposals to introduce minimum quality standards for auto-enrolment pension schemes.
Friends Life says two versions of its master trust will be available to employers – a core version and an enhanced version.
The core solution is a standardised “off the shelf” proposition which uses Friends Life’s core fund range, while the enhanced offering allows employers to bespoke the literature and fund range they use and appoint their own investment adviser.
Friends Life has selected Pitmans Trustees as the sole trustees of the master trust. Pitmans has appointed KPMG as investment advisers and Squire Sanders as legal advisers, with Friends Life providing administration and investment platforms.
Friends Life corporate benefits head of marketing Martin Palmer says: “We have been looking at master trusts for a while but the reason we are now launching a proposition is we see a significant opportunity given the focus there is on governance at the moment.
“We wanted to offer something that gives employers some of the flexibility of a contract-based scheme within a trust-style governance structure.”
Palmer says charges will vary from scheme to scheme but will be compliant with a 0.75 per cent cap.
PSG Financial Solutions director Petra Griffiths says: “It is very late in the day for Friends Life to be launching this proposition but its is obviously good to have more options. Their service will need to improve if they are going to compete with the existing providers.”