Question to the Department for Work and Pensions:

To ask Her Majesty's Government what steps they are taking to ensure that a proper audit of the accuracy of a master trust's pension contribution records has taken place before it is permitted to exit the market or merge with another trust.

Trustees are required to act in accordance with their fiduciary duties to the beneficiaries of the scheme, as well as legislative requirements. This includes running and managing the scheme, and ensuring the accuracy of the scheme’s contribution records.

The Pension Schemes Act 2017 introduced a requirement for Master Trust schemes to notify the Pensions Regulator if they intend to exit the market prior to the introduction of the new authorisation and supervisory regime from October 2018 and for the Regulator to have close oversight of the process.

The new authorisation and supervisory regime for Master Trusts requires that Master Trusts demonstrate to the Pensions Regulator that they have effective systems and processes. This includes whether the scheme can process transactions, including contributions, automatically and securely and whether it has the capability to carry out data reconciliations against transactions.

Master Trusts must be able to quickly identify missing contributions and have a process in place to rectify any issues. The Regulator has a separate Code of Practice on the payment of contributions and can take action where contributions are not invested.

Where a Master Trust exits the market the trustees must submit a detailed implementation strategy to the Regulator for approval. This includes details of how scheme pension contributions will be handled. Trustees are required to comply with the implementation strategy to the satisfaction of the Regulator.