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The new assurance framework for master trusts, being developed by the ICAEW, is a missed opportunity to introduce a proper regulatory regime for multi-employer automatic enrolment schemes, The People’s Pension, said today.
The ICAEW has been consulting on its proposed control framework. The framework aims to ensure that master trusts get independent verification that they meet The Pensions Regulator’s (TPR) features for what will make a good defined contribution (DC) scheme. While The People’s Pension supports the efforts of TPR to improve scheme quality, especially the key features work, it is concerned that TPR’s proposed approach fails to provide a regulatory regime for master trusts that is fit for purpose and will not give members value for money.
Darren Philp, Director of Policy and Market Engagement at B&CE, said:
“With millions being automatically enrolled into pensions over the next few years, it is vital that we get the regulation of large scale multi-employer schemes right. This is vital to ensure members have adequate protection and schemes are being run in the best interests of their members.
“The proposed audit framework produced by the ICAEW is no substitute for proper regulation by TPR. We want to see a suitable regulatory framework being developed for master trusts. This includes introducing appropriate barriers to entry to ensure trustees are truly independent, that schemes are durable and that they are being run in the best interests of members.
“The levy windfall that TPR and the government will get through millions of people being automatically enrolled into pensions over the next few years should be used to create a durable regulatory framework. Simply outsourcing this regulation to auditors just adds additional cost, without delivering greater regulatory protection for scheme members. We urge TPR and the government to think again.”