The Pensions Regulator (TPR) has authorised the first master trust as part of new laws to implement tough standards in the market.
Master trust authorisation was set up to strengthen protections for almost 14 million members in a growing market, which has more than £29 billion in assets according to latest figures.
Today TPR confirmed LifeSight is the first master trust to gain authorisation.
Nicola Parish, Executive Director of Frontline Regulation at The Pensions Regulator, said: "The first authorisation of a master trust is a landmark moment and a step towards a market of schemes with better safeguards around them.
"By the end of the year every master trust which continues to operate will have proven that the scheme and its trustees meet the standards laid out in the legislation and code of practice, and which will better protect the millions of members and billions of pounds in those schemes.
"Generally, we believe authorised master trusts are a good option both for employers looking to fulfil their automatic enrolment duties and for trustees of schemes who are looking to consolidate."
Minister for Pensions Guy Opperman said: "This is an important moment for the pensions industry. Authorisation will ensure master trusts – managing billions of pounds on behalf of millions of members – are strong, safe and deliver for workers.
"With record numbers saving for retirement, including millions through automatic enrolment, it’s vital to have the right protections in place across the board."
Master trusts have to file applications to TPR outlining how a scheme meets the required standards. Under the legislation, master trusts must have fit and proper people, sufficient financial reserves, robust systems and adequate plans in place to get authorisation and operate in the market.
Master trusts which receive authorisation will be published on a list of authorised schemes.
Master trust scheme trustees have until 31 March 2019 to apply to TPR for authorisation or begin a process of exiting the market which includes moving members to an alternative scheme. Figures about the market are published every month.
Notes for editors
1. A master trust is an occupational pension scheme that provides money purchase benefits for multiple, unconnected employers.
2. The authorisation and supervision of master trusts by TPR was introduced in the Pension Schemes Act 2017 and Occupational Pension Schemes (Master Trusts) Regulations 2018, with the legislation supported by the Master Trust Code of Practice.
3. The Pensions Regulator is the regulator of work-based pension schemes in the UK. Our statutory objectives are: to protect members’ benefits; to reduce the risk of calls on the Pension Protection Fund (PPF); to promote, and to improve understanding of, the good administration of work-based pension schemes; to maximise employer compliance with automatic enrolment duties; and to minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of the regulator’s functions under Part 3 of the Pensions Act 2004 only).