Master Trust Transitions

About

With the rise of defined contribution (DC) master trusts as a mainstream pensions vehicle for millions of people, they’ve come under much greater focus.  Additional regulation and authorisation requirements are now in place to ensure master trusts are robust enough to stand the test of time.  It’s imperative any master trust transition, be it between master trusts or between single employer DC schemes and master trusts, follows not only the prescriptive legislation but also industry best practice.  It’s, after all, individual’s long term savings and retirement incomes being administered.  We all have a duty to ensure they have good outcomes and administration is critical.

It’s clear with the added authorisation requirements and ongoing supervision, master trusts have a high standard to meet, and rightly so.  This extends beyond their financial and operational aspects to how one master trust transitions to another.  When we talk about these transitions in this Guidance, we focus on DC and Continuity Option One.  This is the situation where trustees of a master trust must transfer out all their members and wind up.  While Continuity Option One is mandated in these situations, it also provides a robust framework which all single employer DC schemes transferring to a master trust would benefit from adopting.  The Guidance compiled in this document, and other PASA related Guidance, creates a best practice framework to assist employers, trustees and advisers, ensuring members benefits are correctly recorded and administered.

This document provides guidance and instructions for all stakeholders involved in the administration processes for master trust transitions.

Publications

November 2019 – PASA Master Trust Transition Guidance Final