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.

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Our Master Trust Is MAF Accredited

Our master trust - 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 Master Trust.

We also have a 5 star Defaqto rating. Learn more.

Master Trusts

Master trusts are popular because they offer a cost-effective and convenient solution for companies needing to auto enrol their employees into a workplace pension scheme. Rather than the time-consuming and costly business of having to create their own pension trusts, companies can share the use of a single master trust instead. The master trust governs the way the pension scheme is run and because there is only one trust and one board of trustees, it is much more cost effective. Companies make their pension contributions through the master trust and their employees' money is ring-fenced into separate accounts – so-called sections.

Master trusts are well-established and were first introduced in the 1950s. They are governed by professional, experienced, trustees and regulated by the Pensions Regulator. The law places a heavy burden on trustees to be appropriately qualified in terms of their knowledge and understanding of pensions, trusts and investment. Their job is to look after employees' interests in line with the rules of the trust. Trustees will usually have a background in the financial services or legal industry and years of experience in dealing with pensions.

Smart Pension Master Trust – Master Trust

Smart Pension's master trust, the Master Trust, is governed by trustees, who make sure it is properly run, and is regulated by the Pensions Regulator. We are currently preparing to be audited against the master trust assurance framework – or MAF – which is the regarded as the gold standard for operation of master trusts. When it is awarded, we will be the only auto enrolment provider which is free for employers to have a 5-star rating by Defaqto and hold MAF accreditation. The board of trustees of the Master Trust has over 36 years of experience in pensions between them. The board is chaired by Claire Altman of leading trustee firm Capital Cranfield Trustees Ltd. Claire is a practicing pensions lawyer and qualified as a barrister in 1997 after studying law at Cambridge University. She is a former partner at Sackers and Partners LLP (a City law firm specialising in pensions) and is a specialist in relation to trusts.

What happens to the money in the Master Trust

While the pension scheme is overseen externally by experienced trustees, it is also administered day-to-day by independent experts. We use Apex Fund Services, one of the world's largest independent fund administrators. Apex is regulated by the Financial Conduct Authority (FCA). Apex has over 600 staff globally and administers funds worth $45 billion (USD) for clients around the world. Pension contributions made into the Master Trust are received by Apex directly from employers, to ensure the correct contributions have been made and received. The contributions are then invested through funds managed by the Legal & General, one of the UK's leading financial institutions. The Legal & General Group is a UK authorised financial services firm and is regulated by the Financial Conduct Authority (FCA). As a result, the money and investments it holds are protected under the Financial Services Compensation Scheme (FSCS).

Pension pot spill

We also have a Sharia fund, managed by HSBC, and again as HSBC is regulated by the FCA, pensions are protected under the FSCS. Taken together, these measures mean members' pensions are safe – safe if their employer goes out of business and safe in the case of any other eventuality.

The Smart Pension Proposition Structure

Proposition structure

What is Master Trust Assurance (MAF)?

Developed by the Institute of Chartered Accountants in England and Wales in conjunction with the Pensions Regulator, master trust assurance (MAF) is a voluntary framework providing an independent review against an industry-wide quality standard. It enables trustees to evaluate the quality of their pension scheme, and demonstrates compliance with control objectives for governance and administration. It stipulates the review to be conducted by independent reporting accountants in assessment of the operational effectiveness of a master trust's controls and procedures. The control objectives it sets out are consistent with the majority of the DC quality features set out by the Regulator's DC code of practice and with DC regulatory guidance.

By acquiring master trust assurance (MAF), trustees are able to demonstrate that their master trust is managed to the highest of standards. The framework is also useful for employers seeking legitimate, well administered pension schemes for their workforce in compliance with their auto enrolment duties.

Obtaining Accreditation

To obtain master trust assurance (MAF), the design and operating effectiveness of the scheme's control procedures will need to be assessed by an independent reporting accountant commissioned by the trustees. Once assessed, a report detailing how the scheme's procedures align with the framework's control objectives will be produced, based on the Regulator's existing materials and guidance. The framework follows the six principles listed below:

  • Essential characteristics: Schemes that operate fairly and are designed to be durable whilst delivering desirable outcomes for its members.
  • Establishing governance: Schemes that establish a comprehensive governance framework, where accountabilities and responsibilities are made clear and transparent from the start.
  • People: Scheme decision makers have a solid understanding of their obligations and the competency to ensure that their duties are actioned accordingly.
  • Ongoing governance and monitoring: Schemes that have in place effective governance and are monitored through their entire life cycle.
  • Administration: Well- administered schemes with comprehensive processes, and records that are timely and accurate.
  • Communication to members: Schemes that ensure communications to their members are clear, enabling them to make well-informed decisions about their investment.
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It is the responsibility of the trustees to ensure that their control objectives meet the good practice guidance standards as set out by the Pensions Regulator. Accredited master trusts are expected to publish their report annually.

We, Smart Pension, fully support the master trust assurance framework and whilst it is not mandatory, we believe that providing a thorough report to our potential and existing customers gives a better understanding of our accountabilities, and the governance and administration arrangements of the master trust. We have received full accreditation for our master trust, as we are committed on providing the highest standards for our members. Click here to read our full independent master trust assurance report detailing the control procedures in place for the Master Trust.

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