On the go: With just over three weeks left until the end of the authorisation window for master trusts, 13 applications have been received by the Pensions Regulator from the 90 master trusts in the market, meaning it could face a last-minute tsunami of applications, according to consultancy Hymans Robertson.
Just one master trust, Willis Towers Watson’s LifeSight, has received authorisation so far.
The Pensions Regulator expects the introduction of authorisation to drive consolidation of the market.
Its monthly report, published on March 6, states: “Eight schemes have exited the master trust market so far, and a further 31 have notified us of a triggering event to exit the market, and will transfer their members to an alternative master trust scheme or other appropriate vehicle.”
The remaining 38 master trust schemes will have to either apply for authorisation or trigger their exit from the market.
Under the Pension Schemes Act 2017, trustees can apply for an extension of up to six weeks beyond the authorisation application window.
For it to be granted, they must satisfy the regulator that there is good reason for the application, which the watchdog has said it will consider carefully, based on the individual circumstances. As at February 28 2019, one scheme has been approved for an extension.
The regulator has warned master trusts to “make sure you plan enough time to complete and send us your application by 31 March 2019”.
Among the frontrunners who have already applied for authorisation are Legal & General and Evolve Pensions, which manages Crystal Trust and BlueSky. Aon is expected to apply shortly.
Commenting on regulator’s latest update, Sharon Bellingham, senior consultant at Hymans Robertson, said: “We now see that a further four applications have been received by TPR. All eyes are still on the remaining 38 – which are yet to show their hand – to either submit or choose to exit the market.”
She added: “Given the scale of what’s involved and what’s required, it’s sensible that schemes are taking time to ensure a solid and robust application, although I do hope that TPR is prepared for a possible tsunami of applications, which are expected ahead of the 31 March deadline”.
