The Pensions Regulator (TPR) has published a statement aimed at supporting multi-employer defined contribution (DC) scheme trustees with meeting the new scale requirements set out in the Pension Schemes Bill (PSB).

The statement follows a paper published by the Department for Work and Pensions (DWP), which outlined the pathways DC master trusts can take to meet the PSB scale measures.

Under the PSB requirements, multi-employer DC schemes will need to hold at least £25bn of assets in a main scale default arrangement (MSDA) by 2030.

Transition pathways will also be introduced for schemes that need longer to meet the full scale requirements.

TPR urged DC master trust trustees to evaluate their potential to grow to scale, develop evidence-based projections, and review their operational readiness for the upcoming requirements.

Its analysis showed there was “significant momentum” and growth potential in the master trust sector, and the regulator called for caution from advisers and employers that may be questioning which master trusts were not yet at scale and would be able to meet scale within the timeframe.

TPR’s statement looked to support a ‘smooth’ transition to scale, aiming to reduce uncertainty and help trustees, employers, and advisers understand the types of analysis and preparation that will be relevant when the requirements come into force.

Ahead of the changes, TPR urged trustees to start considering how their scheme might grow over time, including analysis of organic and potential inorganic growth; what evidence may underpin future growth projections, including demographic factors, contribution flows, and investment assumptions; and whether their governance, systems, and processes were positioned to support future scale requirements.

It also called on trustees to begin considering how their investment capability and governance align with wider reforms in the PSB, and what the new requirements could mean for current and future members, including value for money and long-term outcomes.

TPR highlighted that employers and employee benefit consultants played a key role in shaping market outcomes, and encouraged them to take a balanced, evidence-based approach when selecting or reviewing a master trust.

The regulator urged employers and employee benefit consultants to consider compliance with auto-enrolment obligations; value for money, including investment performance and service quality; governance and operational resilience; preparedness for the proposed scale requirements; and quality of administration and transition processes.

“We want master trusts to consider their potential to grow, understand the evidence that may be needed in future, and assess their operational readiness for the changes proposed in the bill,” said TPR executive director, strategy, policy, and analysis, Richard Knox.

“By preparing early, trustees can make informed decisions that support long-term value for their savers.

“Employers and advisers also have a vital role to play, and we encourage them to take a proportionate, balanced approach that focuses on what delivers the best outcomes for members.”

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