Have you ever watched The Great British Bake Off?

The contestants are really put under pressure to prove their flair.

Over several weeks, they have to bake a diverse set of goodies, showing different baking skills under intense time pressure.

The challenges gradually become harder, standards rise (as well as the cakes – sorry!)…cupcake-62

And by the time you’re down to the last few finalists, the viewers can generally be sure that they’re watching some very fine, albeit exhausted, chefs.

At least, that’s what I’m told by my wife, who is a professional chef and restaurateur, and the main consumer of cooking shows in our household 😊

But for the last few months, I’ve been relating very strongly to those contestants.

You see, my team and I have been through a very gruelling challenge of our own…. To do with pensions.

You might recall that back in September, I mentioned that we were in the process of applying to the regulator for authorisation for our Master Trust.

These are where a board of trustees oversees several schemes from different employers at the same time.

With so many people requiring pensions under auto-enrolment, many companies have turned to Master Trusts to handle the governance and administration of their schemes.

And providers answered the rising demand.

Unfortunately, because Master Trusts were so loosely regulated, the bar for starting a new one was low.

Which is why recently, the regulator wisely decided that it’s time to insist Master Trusts prove they are fit-for-purpose.

It’s unclear how many are going to apply for official authorisation by the deadline of March 31, 2019 – 35 of around 90 Master Trusts on the market have already preferred to wind up¹ -- but we are very nearly there.

And boy, has the regulator put us through our paces!

To give you a few examples….

The first step towards authorisation was a readiness review, which concluded in June. We weren’t told the regulators’ requirements until late spring, so we had to get our skates on to complete it in time.

Our submission covered questions such as, who is involved in running our Master Trust? What systems and processes ensure it operates smoothly? And what are the scheme’s financial details?contract

All in all, it was 200 pages long and took two full days simply to upload it all to the regulator’s website.

Each document had to be reviewed extremely carefully to make sure it covered all the regulator’s requirements.

We also had to make sure every single word was in plain English, with absolutely no jargon. A common sense approach, you’ll agree, but a time-consuming one nevertheless…

At the end of August, the regulator came back to us with its comments, for example asking us to link our presentation back to regulations.

And to cap it all, the goalposts have kept moving because this is a learning process for everyone, including for the regulator.

Preparing our case for the final submission – hopefully in the new year – has become a full-time job for many people in our team.

We’ve also brought in leading law firms and auditors to give us external support.

This shake-up across the industry has led to some paralysis in the system, as people are, justifiably, less inclined to make the move to a Master Trust (or switch trusts) until the new landscape becomes clearer.

We have even had to put an important part of our own Master Trust on hold while we’re part of this process. (I’ll tell you a bit about that next week).

But the good news?

Once this demanding process is complete, you can have full confidence that the Master Trusts who receive authorisation are completely reliable and safe for you and your members, because they’ll have the regulator’s stamp of approval.

Those who do make it will have passed a very high bar in terms of offerings and performance, and there will likely be a lot more innovative products for you to consider and take advantage of.

But there will be significantly fewer providers because only the best ones will survive.

We’re doing everything necessary to be one of them.

So if you happen to catch some stressed Great British Bake Off contestants working their way through a series of ever-tougher baking challenges on the Christmas special…….

Spare a thought for a slightly exhausted group of pensions professionals who have spent the last few months going through a real-life set of challenges….

...Hoping to make it to the Master Trust finals….

…And wish us a sweet ending.


¹ http://www.pensions-expert.com/Law-Regulation/TPR-Only-one-master-trust-authorisation-in-the-pipeline-so-far

Posted by Steve Butler

Topics: AVC Master Trust

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