What happens to the money in the AutoEnrolment.co.uk 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 AutoEnrolment.co.uk 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).
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.
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.
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 AutoEnrolment.co.uk Master Trust.