Master trusts

Master trusts are becoming increasingly popular with automatic enrolment and cost pressures pushing employers to seek out the most practical solutions.

We act for a wide range of master trusts and are familiar with their particular design and governance issues. We also advise employers and trustees on transferring into master trusts. So, whether you are considering setting up a master trust or transferring into one, we can advise on the legal requirements, the statutory minimum governance standards applicable and the master trust assurance framework. We can also help with changes to investment strategies, in particular switching exercises, managing conflicts of interest between the trustees and the provider, and investment options (including the default).

We monitor developments in the master trust arena generally and, in particular, the progress of the Pension Schemes Act 2017 and accompanying regulations. This includes analysing whether schemes fall under the remit of the new Act, assisting with applications for authorisation, helping with winding up where schemes fail to meet requirements or do not wish to be authorised, advising on how to meet entry criteria, and ongoing requirements such as making the necessary notifications.

Read our DC Hot Topics on master trust supervision regimemaster trust authorisation, transferring to a DC master trust and exiting the DC master trust market for more information.

Recent experience

  • Advising providers on the establishment of new master trust arrangements and the legislation applicable to workplace pension arrangements
  • Advising 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, 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, and advising on scheme rule changes and member communications
  • Integrating 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 and entire DC sections to master trusts
  • Advising employers on their ongoing duties and obligations when participating in a master trust.