A voluntary assurance framework that will enable trustees of ‘master trusts’ to demonstrate to employers that their scheme is managed to a high standard has been published today.
The framework has been developed by the The Pensions Regulator and ICAEW following consultation last year, and is developed to support trustees of master trusts and the practitioners who are engaged to provide independent assurance reports. TPR will publish a list of schemes that meet the framework criteria.
ICAEW has published guidance on applying the assurance framework to occupational defined contribution (DC) master trusts.
The assurance framework sets out how trustees should report against a series of ‘control objectives’ related to governance and administration, which are aligned with the regulator’s DC quality features, and which procedures practitioners must undertake.
TPR has previously expressed concern over the potential risks of a proliferation of poorly run master trusts.
TPR executive director for DC, governance and administration Andrew Warwick-Thompson says: “We expect well-run master trusts to play a central role in helping people retire with an adequate income in the future.
“It is important that schemes operating in this market place are scalable, durable, well-governed and embrace high standards of practice. Assurance acts as a check against schemes being set up by people who lack the competence or financial resources to take care of people’s pension savings adequately.
“Whilst voluntary, we expect master trusts to obtain this independent assurance and we strongly support those providers who have already informed us of their intention to adopt this important accreditation.”
ICAEW audit and assurance faculty head Henry Irving says: “Confidence in the governance and administration of master trusts is very important, whether you are an employer or an employee.
“This assurance framework, developed in collaboration between ICAEW and The Pensions Regulator, offers practical guidance to accountants and auditors on the provision of independent assurance, setting out the procedures required to assess the effectiveness of a master trust’s control procedures.”