PASA's Lorraine Harper discusses why administration standards are important for Master trusts
As Auto-enrolment becomes embedded into the UK pension landscape, it's predicted that most employers will seek to comply with their regulatory responsibility by enrolling new members into Master Trusts.
Earlier this week, PASA announced that it had been looking at how traditional occupational pension scheme administration standards could be applied to these types of schemes, and had launched its first pilot accreditation process with a Master Trust, expected to complete before Christmas.
Why the focus on Master Trusts?
Most existing, and certainly all new Master Trusts, are DC. As the number of members in Master Trusts increase, so too will the pressure on the administrators to process multiple financial transactions, quickly and accurately and engage successfully with the members. These financial transactions must be reflected in the administration records through unitisation, member level and scheme level reconciliations, etc. making good use of administration and member friendly technologies.
A successful Master Trust must have top quality administration to achieve these requirements. The complexity of delivering multi-employer pension arrangements through a Master Trust is just as dependent on its administration processes as it is on achieving good investment returns if it is going to succeed in delivering good outcomes for its members,
Whilst there are other quality standards out there, none focuses entirely on administration or is outcomes-based like the PASA Accreditation. Although the Master Trust Assurance Framework is currently acknowledged as the primary standard by the Pensions Regulator (TPR), we have had positive discussions about how PASA Accreditation and its principles could fit into a future framework.
Progress to date
Over the past year, we have been working to fine tune the developed standards to address the differences in delivering administration from a Master Trust environment. There are many different types of Master Trusts focusing on different approaches to the provision of pensions, so standards should be useful and relevant to all, able to capture the nuances without compromising the quality and integrity of accreditation.
Through the pilot exercise, we will develop and improve the standards in this important area, as well as the assessment itself, so that we are ready to launch the Accreditation to the wider industry stage in early 2018. PASA is already in discussion with a number of Master Trusts wishing to achieve accredited status once the pilot is complete and we are very excited by this strong pipeline.
Written by Lorraine Harper, Chair of PASA's Accreditation Committee
