This marks a fundamental change in the way TPR will operate, directly authorising and supervising Master Trusts for the first time.
Applications are not yet open, but the TPR will publish new application forms, and guidance on how to complete them, on 1 October 2018 on their website:
The new code details the actions Master Trusts must take to be authorised.
The new authorisation process will focus a lot of attention on systems and processes, which emphasises the importance TPR places on establishing and maintaining adequate internal controls.
The requirements set out in the code are very detailed, but in certain cases they are still a little unclear, so it is likely they will be clarified before 1 October 2018.
Many Master Trusts have found it hard to work out what evidence they need to present, to prove the presence and effectiveness of systems and processes.
For 17 system and process requirements, TPR prefers external assurance.
In our view, a number of new requirements are similar to the control objectives set out in the Master Trust Assurance Framework. But there are gaps, and in these cases it is sensible to make sure these procedures are externally assessed.
Master Trusts will have to continue to meet authorisation criteria after they have been authorised the impact of de-authorisation would probably be catastrophic to any Master Trust.
How this ongoing compliance will be regulated is not clear yet, but we do know that:
Updated guidance and further guidelines will be produced by TPR in the run up to 1 October 2018.
Time is short, and the new code is complex, so we can help with your application.
We have in-depth knowledge of codified requirements, so we can help Master Trusts assess their systems and processes.
We can deliver assurance reports to supplement applications in realistic timeframes.
If you would like to discuss any of this, please contact your usual Crowe Pension Funds advisor or Phil Spary, Director in our National Pension Funds Team.