Master trusts

In the last few years a number of master trusts have entered the pensions market.  They provide a solution for employers who want the advantages of a trust-based scheme without the cost and time of setting up and running their own arrangement.

Some master trusts are run by industry bodies, others have been set up by insurance companies and investment/administration managers. They have in common the ability to operate as a multi-employer occupational scheme on a large scale. We act for a wide range of such schemes and are familiar with their particular design and governance issues.

How we can help

  • Advice on the legal requirements for establishing master trusts
  • Advice on the statutory minimum governance standards applicable to such arrangements, and TPR’s master trust assurance framework
  • Advice to trustees and employers on transferring into master trusts
  • Advice on changes to investment strategies, in particular switching exercises
  • Advice on managing conflicts of interest between the trustees and the provider
  • Advising in relation to to investment options (including the default).

Our extensive experience means we appreciate the different context within which a master trust set up by a provider who is providing administration, investment and other services operates, and we understand the need to be sensitive in reconciling the trustees’ duties with the interests and aims of the provider.  This specific experience is underpinned by our wide-ranging knowledge and understanding of occupational pension schemes.

Recent experience

  • Advising providers on the establishment of new master trust arrangements and the legislation applicable to work based pension arrangements
  • Advising both employers and trustees on the issues to consider when deciding whether to join master trust arrangements for past and future service
  • Developing a provider’s new master trust including drafting the trust deed and rules and providing ongoing advice to the Trustee of the master trust, including on bulk transfers in and meeting ongoing governance requirements
  • Converting an industry wide DC scheme with several hundred participating employers into a master trust, designing the benefit structure, scheme rule changes and member communications
  • Integration of an occupational scheme in the higher education sector with a master trust benefits section from a provider to create hybrid future service accrual
  • Advising trustees of DC schemes on the potential winding up and bulk transfer of entire schemes to master trusts
  • Providing trustee training to the board of large master trust
  • Advising employers of ongoing duties and obligations when participating in a master trust.