Master trusts

What are master trusts?

Master trusts are occupational pension schemes (other than a public service pension scheme) that are used, or intended to be used, by unconnected employers to provide pension benefits to their respective members.

Master trusts are not new—they originated in the 1950s when they were commonly related to a specific industry (eg the voluntary, printing and construction sectors) or specific geographic area. Several long-standing examples are available in the market. However, there has been a refocusing on this type of arrangement as a vehicle for auto-enrolment. For further information on auto-enrolment, see Practice Note: Auto-enrolment—an introduction.

Several definitions of master trusts were developed over time. The Pensions Regulator was the first to attempt to define master trusts. It did so in November 2013 when it published its first Code of Practice on defined contribution (DC) schemes. However, that definition was later dropped in favour of the term ‘relevant multi-employer scheme’ which was used in the Occupational Pension Schemes (Scheme Administration) Regulations 1996 (the Scheme Administration Regulations), SI 1996/1715 and is meant to include master trusts.

It was not

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

TAKE A FREE TRIAL

Latest Pensions News

ESAs jointly consult on draft guidelines for ESG stress testing in banking and insurance

The three European Supervisory Authorities (the European Banking Authority, the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority—ESAs) have published a joint consultation paper on 27 June 2025 containing draft guidelines for integrating environmental, social and governance (ESG) risks into supervisory stress tests for banks and insurers. Developed pursuant to Article 100(4) of the Capital Requirements Directive (Directive 2013/36/EU) and Article 304c(3) of the Solvency II Directive (Directive 2009/138/EC), the guidelines aim to ensure consistency, long-term considerations and common standards in ESG stress testing methodologies across the EU financial sector. They outline expectations for competent authorities regarding the design, governance and operational features of such stress tests, including the need for relevant expertise, access to high-quality ESG data and appropriate timelines for scenario analysis. Responses are sought by 19 September 2025, with a public hearing scheduled online for 26 August 2025.

CP25/17: FCA consults on targeted support regime for pensions and investments

The Financial Conduct Authority (FCA) has published consultation paper CP25/17, setting out proposals to introduce a new form of regulated support known as ‘targeted support’ for consumers making decisions about pensions and retail investments. The proposals would permit firms to offer suggestions to groups of consumers with similar characteristics, such as those under-saving for retirement or holding significant cash balances, without providing personalised financial advice. The FCA stated that targeted support would be subject to a separate regulatory framework and require a dedicated authorisation gateway. Several supporting research notes were published alongside the consultation. Responses are sought by 29 August 2025, and the FCA intends to publish final rules by the end of 2025. The government is expected to consult on legislative amendments to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, SI 2001/544, to establish a new specified activity for targeted support. A policy note and draft statutory instrument are due to be published alongside the Chancellor’s Mansion House speech on 15 July 2025.

DWP to evaluate pension scheme climate disclosure regime as part of government’s modernisation of climate disclosure and transition planning in UK financial markets

As part of its efforts to modernise the UK’s sustainability reporting framework, the government has introduced three consultations intended to “unlock billions in clean energy investment”. In doing so, the government is consulting on how to implement its manifesto commitment to mandate UK-regulated financial institutions (including banks, asset managers, pension funds and insurers), as well as FTSE 100 companies, to develop and implement credible transition plans that align with the 1.5C goal of the Paris Agreement. The government sees transition planning as a vital part of its commitment to secure the UK’s position as the green finance capital of the world. Notably, one consultation from the Department for Energy Security and Net Zero, seeks views on how the government should implement this commitment by ensuring an orderly transition aligned with global climate goals, aiming to enhance transparency to facilitate efficient capital allocation, enabling companies to seize opportunities from the global net zero transition, and bolstering the growth and international competitiveness of the UK’s financial services industry. In particular, the consultation from the Department for Energy Security and Net Zero indicates that during 2025, the Department for Work and Pensions (DWP) will conduct a review of the Occupational Pension Schemes (Climate Change, Governance and Reporting) Regulations 2021, SI 2021/839, utilising evidence provided by the Pensions Regulator (TPR). The DWP regards this review as a logical starting point to assess the effects of the current climate disclosure regime (put in place following the recommendations from the Taskforce on Climate-Related Financial Disclosures (TCFD)) and to consider future steps for climate change reporting. In parallel with the TCFD review, the DWP has tasked TPR with evaluating the feasibility of transition plans within pension schemes. Accordingly, TPR is organising an industry working group, including key stakeholders and major occupational pension schemes, and is set to deliver its findings to the DWP later in 2025.

TPR chief calls for investment industry innovation amid pension consolidation growth

The Pensions Regulator (TPR) CEO Nausicaa Delfas has urged investment managers to play an active role in the ‘pensions revolution’ during her speech at the Investment Association conference on 26 June 2025. She challenged the industry to develop innovative products that truly support pension trustees, foster long-term assets, and design dynamic, personalised default fund strategies and multi‐asset solutions for decumulation. The call comes as TPR data shows defined contribution schemes grew to £205bn in assets for 2024, while scheme numbers fell 15% through consolidation and long term asset funds increased from one in 2023 to eight umbrella funds in 2025. In response to these industry shifts and the transformative framework introduced by the Pension Schemes Bill, TPR has announced plans for a new trusteeship strategy coupled with a forthcoming value for money framework, which aims to enhance scheme scrutiny and deliver better long-term outcomes for savers.