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In our previous article, ‘Innovating the UK pension market and the future of pensions’, we highlighted that we believed the most likely inheritor of the ‘pension throne’ would be the Master Trust structure of Defined Contribution (DC) pension schemes. Having grown in popularity since the roll-out of auto enrolment, the use of Master Trusts has almost doubled since 2015 among FTSE 350 firms. According to figures from the 2017 DC Pension Scheme Survey, which collected data from 259 companies, it found that nearly one in six (15%) were using Master Trusts as their main pension option, compared with 8% in 2015.

During the same period, closures of Defined Benefit (DB) pension schemes were up 8% and DC has certainly become the norm being offered to employees, with 98% of FTSE 350 companies offering this type of pension to new staff. Within this, Master Trusts are clearly being recognised by employers and employees alike and this trend looks like it will only increase.

So what is the attraction?

Under the Master Trust structure, many employers sign up to effectively use the same pension scheme for their staff providing each employer with attractive economies of scale in terms of costs and purchasing power around investment, administration, advisory services and compliance charges. Participating employers are all using the scheme as a tax efficient savings vehicle for both member and employer.

Within the most modern of Master Trusts, employees are able to take advantage of all of the investment options found in any Defined Contribution pension scheme while still being able to take advantage of popular options, such as flexible drawdown which is much in demand, since the introduction of pension freedoms and a commonly cited reason for a move away from defined benefit schemes.

Typically a Master Trust is governed by a set of Rules that are enforced by professional Trustees, independent to each of the participating employers, and importantly the ‘sponsor’ of the scheme, thus applying the principles of good scheme governance in an equal and fair way to all members. With the operation of the Trust often involving many different parties, such as administrators, investment managers and possibly advisers, it’s important that trustees take care to continually assess the strength and quality of the governance and management of the Master Trust.

Master Trust schemes are regulated by The Pensions Regulator, who set up a kitemark accreditation (the Master Trust Accreditation Framework, or MAF) to assess Master Trusts against key standards of operation. With MAF assessing the governance and administration performance of the Master Trust, and with The Pension Regulator publishing the list of any Master Trust that has achieved, and maintained, these standards, it is made easy for any employer to check the credentials of the scheme they use, or intend to use, and for Trustees to identify areas of concern.

The Pensions Regulator actively monitors any trust against these strict criteria and if they have concerns about a scheme that has been awarded the MAF, they will consider removing it from the list of such approved arrangements. A recent case involving NOW: Pensions resulted in them voluntarily relinquishing the MAF given issues associated to the governance and administration of their Master Trust, including delays in processing some contributions and communicating with a portion of members.

At Creative we are very proud that the Creative Pension Trust, our Master Trust solution designed to help employers meet their Automatic Enrolment obligations, not only holds the MAF kitemark but is also one of a relatively small number of schemes open to all employers, as listed on The Pension Regulator’s website. No matter your size or employee profile the Creative Pension Trust can be the ideal solution for you and your staff and currently many thousands of employers do exactly that.

It is our conviction that Master Trusts, and therefore the Creative Pension Trust, look set to continue to be the rising star of pension saving provision in the UK. If you have any questions about how a move to such structure could be beneficial to you and your staff, or how the wider services from Creative like Group Protection, Healthcare or general employee benefit provision could help promote such benefits to your employees, then please get in touch through your Creative consultant, or contact us at


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