The Pensions Regulator has reasserted its need for greater powers to regulate master trusts to remove potential risks and improve sustainability.

Speaking at today’s Society of Pension Professionals annual conference, TPR chief executive Lesley Titcomb explained: “We welcomed the announcement of the new pension bill, which proposes, among other things, to give us more power to regulate master trust schemes.

“We have been working closely with the Department for Work and Pensions across provisions over the summer and we are expecting that the bill will address these once it is published.”

While Titcomb acknowledged that the regulator has been doing what it can to identify particular problems and understand master trust business models to encourage improvements where necessary, she stated that this may not be enough. Therefore, the regulator said that it requires greater authority over multi-employer schemes to ensure long-term growth and sustainability.

“Our leverage over them [master trusts], at the moment, is limited,” Titcomb continued.

The suggestion was also made that greater regulation from TPR would better protect employers who have enrolled their business into the scheme.

“We believe that it’s generally good news that people are being enrolled into these larger schemes as they have the potential to offer better governance and better value for members,” Titcomb added.

“But of course this doesn’t remove the fact that there are risks and if something were to go wrong with a master trust that could be very significant, obviously for the members but also for employers who are relying on that master trust to enable to them to comply with auto-enrolment.”

The TPR chief executive went on to celebrate the current success of auto-enrolment saying it is “excellent news” that “a young person leaving education now and joining the workforce will expect to receive a workplace pension”.

With lower opt-out rates than originally expected, the regulator is confident that employer compliance rates will continue to remain high. However, Titcomb stressed that “micro employers, [the most recent recruits to auto-enrolment] do require an entirely different level of support than larger organisations” who were more able to manage themselves.

As a result of this, auto-enrolment and a need for greater control or regulation of mastertrusts is set to remain a high priority for the regulator over the coming years.

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