The Pensions Regulator has raised the minimum amount master trust schemes must hold to £150,000, after many suggested the initial £75,000 funding requirement was too low.

In its response to its consultation on the authorisation and supervision of master trusts published yesterday, 3 July 2018, TPR said that it wanted a more “prudential estimate of costs”.

The number in question is the reserve amount that schemes will have to hold to meet costs incurred in a triggering even, such as winding up, and is particularly important for master trusts with less than 2,000 members.

TPR said: “Some responses suggested that the current minimum to be held by schemes using the basic method (£75,000) was too low. The opinions about the appropriate figure varied from £100,000 to £4m.”

“In respect of the basic method, we felt that a minimum expressed in the millions would not be suitable for smaller and less commercial schemes, for which the basic method is intended. However, on further analysis, we recognise that the £75,000 minimum adequate floor may not be sufficient for every scheme.”

TPR also said there was universal support to reveal the details of how they arrived at the “per member figure”.

Despite this, TPR added that schemes who have the capacity may choose to do a more detailed method for a more “accurate” way of understanding how much they will need to hold in reserve.

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