Master trusts exiting the market have been urged to prepare their data and establish their requirements following the publication of the Pensions Administration Standards Association’s master trust transition guidance.
In response to the guidance, published yesterday (26 November), ITM has encouraged defined contribution master trusts to establish what the timescale, costs and strategy will be when exiting the market to manage the succession effectively.
It also highlighted the importance of analysing and preparing data for transitioning master trusts, as it said receiving schemes will be more willing to absorb master trusts with good quality data and it would improve outcomes for members.
“Data is once again high on the agenda. As master trusts look at exiting the market poor data quality can lead to delays and costly transitions if things go wrong,” said ITM director, Matt Dodds.
“Good quality data is vital to a smooth transition.”
Assessing potential receiving schemes for reliability and governance, and comparing receiving schemes was urged to get the best deal for members.
This includes costs, customer service support, potential for ongoing contributions, and retirement and investment options.
ITM also encouraged master trusts to consider when and how they will communicate the transition process to members and employers.
It stated: “Firstly, check the scheme rules around your power to transfer on the members’ behalf – you might need to make an amendment and communicate to members.
“Think about whether you need a consultation process with members, and possibly employers too, to ensure you know what they expect from a new scheme. You’ll also need to communicate with members before a transfer takes place.
“As you’re preparing your data it’s a good idea to tie in a tracing project to track down members you’ve lost touch with. It’ll make your communications easier and will demonstrate good practice to both members and the TPR.”
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