The Pensions Regulator is under pressure to make its new master trust assurance framework mandatory to drive poor value schemes out of the market.
Last week, TPR published details of a new voluntary master trust standard designed to boost auto-enrolment scheme quality. It sets out how trustees should report against a range of objectives related to governance and administration.
TPR says a small number of respondents urged it to pursue a more supervisory approach, such as introducing a licensing regime.
B&CE, the provider behind auto-enrolment scheme ‘The People’s Pension’, says the proposals risk loading extra costs onto good schemes.
B&CE head of policy Darren Philp says: “Audits are expensive and my worry is good schemes will do it and bad schemes will not. Standards might be improved at the margins for the big schemes but it is not addressing the real issues with smaller schemes.”
Now: Pensions chief executive Morten Nilsson says: “Having a voluntary assurance framework will increase the financial and administrative burden on reputable players while those who it is intended to target will simply turn a blind eye. It also does nothing to address barriers to entry which are far too low.
“While I am completely in favour of raising standards in master trusts, a voluntary assurance framework is no substitute for proper regulation.”
The regulator says: “We will monitor how the market responds to the introduction of voluntary assurance and will consider moving to a more rigorous framework if take-up is poor.”