Understanding more about FSCS and the security of your savings with Smart Pension

Your pension scheme is a defined contribution occupational pension scheme, established under a trust by Smart Pension Ltd, and controlled by professional, experienced trustees. Your employer is one of many who use the scheme as their workplace pension scheme using a shared structure called a Master Trust.

Security of your savings with a Smart Pension workplace pension.

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You have the reassurance of knowing that your personal account is strictly and legally separate from both Smart Pension Ltd and your employer.

A trustee company – EC2 Master Ltd (the Trustee), a majority of whose directors are independent from Smart Pension – has been appointed to manage the scheme in line with the governing trust deed and rules, and is responsible for the investment of members' personal accounts. It is the Trustee's duty to act in the best interests of scheme members and other beneficiaries. The day-to-day administration of the scheme is managed in-house.

The trust structure is intended to deliver a level of member security as it ensures that the scheme's assets are legally separated from the finances of the employers who participate in the scheme, as well as being separate from Smart Pension Ltd.

Your pension fund is also arranged so that new contributions are paid directly into the master trust bank account controlled by the trustees, and invested directly by the external administrators. This separation from Smart Pension is a further level of protection for pension scheme members.


Pensions law with which the scheme has to comply is extensive with a raft of strong member protection requirements.

In addition, the scheme is registered with The Pensions Regulator, the UK regulator of work-based pension schemes. The Pensions Regulator oversees the running of pension schemes and can intervene in cases where scheme trustees, employers or advisers may have failed in their duties. The Pensions Regulator's aims include improving confidence in pensions by protecting members' benefits and encouraging high standards in the way pension schemes are run. The Trustee ensures that the scheme is run in a manner consistent with the codes of practice issued by The Pensions Regulator.

What if things go wrong?

  • If your employer was to become insolvent – the scheme's assets are held under trust and are therefore separate from those of the employers. The assets are therefore unaffected by the insolvency.
  • If Smart Pension was to become insolvent, the scheme assets, being held under trust, are held outside of this company and this event would not result in a charge on the assets.
  • If the trustee company was to become insolvent, new trustees would be appointed – there would be no effect on scheme assets (or therefore on your personal account).
  • If the fund manager (Legal and General Investment Management Ltd or any other investment managers appointed) was to become insolvent, new investment managers would be appointed.
  • Currently, all contributions are invested by our fund manager in regulated pooled investment funds, accessed by a long-term insurance contract. This is a typical investment structure used by many pension funds in the UK and designed to provide further protection to the investor.

Financial Services Compensation Scheme

If our present or future fund manager was ever to become insolvent, in addition to the above protections, it may be possible for any deficit to be recovered from the Financial Services Compensation Scheme (FSCS), although we believe this position has yet to be tested. See www.fscs.org.uk for further information. It should be noted that an insolvency event of this kind that ultimately resulted in a detrimental impact on members' personal accounts would be an extreme event. The Trustee of the scheme keeps all investment managers under careful review based on independent investment advice from a prominent FCA-authorised and regulated investment advisor.

Annuities at retirement

Some members who take retirement benefits from the scheme do so by securing an annuity with an insurance company. If the insurance company does not meet its obligations due to insolvency, members may qualify for compensation in their own name from the FSCS. The maximum level of protection is currently stated by the FSCS as 100% of the retirement income being drawn down from that product as a benefit falling due.

Master Trust Assurance Framework (MAF) & Smart Pension

Developed by the ICAEW in conjunction with the Pensions Regulator, master trust assurance (MAF) is a voluntary framework providing an independent review against an industry-wide quality standard. Learn more below.

Our master trust - Smart Pension Master Trust - is MAF (Master Trust Assurance Framework) accredited.

Click here to read our full independent master trust assurance report detailing the control procedures in place for the Smart Pension Master Trust.

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