The Pensions Regulator has launched a consultation on the supervision and enforcement of master trusts, once they have received authorisation.

Published today, 26 July, the consultation document outlines how the regulator plans to monitor the master trusts, assessing its ability to meet its obligations, quality of governance and business model and strategy.

TPR said that where schemes fail to prevent relevant information, such as trustee minutes or chairs statements, it will use its statutory powers including fixed penalty notices with an escalating penalty. Failure to comply could eventually lead to a criminal prosecution.

TPR head of master trust authorisation and supervision Kim Brown, said: “To do that we need to set the standards which every master trust must meet to operate once they have been authorised, or set up in the market. We will also supervise these schemes to ensure that they continue to meet the authorisation criteria, are well-run and offer good value for members.

“Our policy outlines how we will be collaborative in supervising schemes, but tough to use our powers, including de-authorising schemes, if they drop below the standards outlined in legislation.”

Furthermore, the watchdog added that it will use techniques such as whistleblowing, improvement notices and third-party notices in order to supervise the regimes.

According to the draft policy, master trusts will be asked to withdraw from the market depending on “the frequency and actual or potential impact” of their failures to meet their obligations.

The authorisation process for master trusts will open in October 2018, at which point schemes will have six months to apply or exit the market.

Master trusts entering the market will be subject to greater supervision.

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