Eleven master trusts have asked the regulator for more time to submit their authorisation application, with the position of at least 18 more schemes uncertain.
An update from the Pensions Regulator indicates that 22 schemes have now submitted their application, with one, LifeSight, having achieved authorisation. Eleven schemes have applied for an extension of up to six weeks for their application.
At the end of February TPR said of the 51 schemes still in the sector, eight had exited the market and 31 had triggered their exit from the market, meaning at least 18 schemes are yet to either trigger their exit or apply for authorisation.
Under the Pension Schemes Act 2017, trustees can apply for an extension of up to six weeks beyond the authorisation application window. For it to be granted, they must satisfy TPR that there is good reason for the application.
TPR head of master trust authorisation and supervision Kim Brownsays: “Some master trusts are going through significant changes which will impact how schemes are run and therefore delay their application. Extensions are also important so schemes can avoid accidentally failing over a technicality.
When the legislation was being drawn up for the authorisation of master trust schemes, these scenarios were recognised and the opportunity to apply for an extension was written into the law.
“Any extension application must contain a good reason for us to grant the extension. It is not a foregone conclusion that an extension will be granted. You can expect us to challenge trustees on why they need more time.
“We have granted 11 extensions to date. An additional 9 schemes have applied for authorisation since we last published master trust market figures, bringing the total number of applications so far to 22.
“There are two main reasons why schemes apply for extensions. The first, and a common reason, is a key change to a scheme, such as a new owner, administrator or trustee.
“The second reason is because we are encouraging those filing authorisation applications in the last two weeks of March to also apply for an extension. We are keen that schemes file the best possible application for authorisation, and this ensures that schemes can send us any additional information which we may ask for after the 31 March deadline.
“To put this in some context, applications we have received so far have included up to 872 documents and checks on up to 115 people involved in the running of the scheme to make sure they are fit and proper. Rejecting an application because of a missing piece of paperwork is clearly not in the interests of a master trust or its customers – both members saving for their retirement and employers fulfilling their automatic enrolment duties.
“We have seen a late surge in applications, which we have planned for and we have the resources we need. The coming months will be busy for us but we have a well-resourced and dedicated team which is absolutely ready to assess these applications within our expected timeframes, to ensure all master trusts meet the required standards.”