Providers have played down concerns about potential conflicts of interest in master-trusts after The Pensions Regulator said it is scrutinising the arrangements.
The number of master-trusts in the UK has increased recently, with Now Pensions and B&CE launching propositions in the past year. Standard Life and Legal & General also operate master-trusts.
Speaking at the National Association of Pension Funds conference in Liverpool last week, TPR practice manager Darran Burton said the regulator is scrutinising potential conflicts of interest for trustees of master-trusts who are appointed and paid by the provider which set up the scheme.
Money Marketing understands the regulator has identified a number of master-trusts which have sub-standard governance arrangements.
TPR says there are currently 50 master-trusts in the UK with 258,000 members. It plans to issue a consultation later this year outlining how it expects conflicts of interest to be managed in these schemes.
Standard Life head of workplace strategy Jamie Jenkins says: “We avoided any scope for conflict of interest by appointing an independent trustee.
“One of the key issues here is around investment decisions. If there is someone involved in making those decisions and they are recommending the provider’s own investment funds then clearly there is a scope for conflict.”
Legal & General pensions strategy director Adrian Boulding (pictured) says: “Most trustees have conflicts of interest and it is important these are declared and handled properly.”