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First master trusts hit with fines

15 January 2017

The Pensions Regulator (TPR) issued its first fines against master trusts who fail to fully demonstrate good governance.

The trustee of Nurture Master Trust was ordered to pay £2,000 for failing to prepare a chair’s statement for the scheme. The maximum fine was imposed because the scheme had a professional trustee in place and there were no mitigating factors.

Separately, the trustees of Save and Prosper Funds were fined £3,020 after failing to prepare a chair’s statement for three master trust schemes.

TPR has issued a regulatory intervention report about both cases. In all the schemes the relevant trustee has now produced chair’s statements.

Nicola Parish, Executive Director for Frontline Regulation at TPR has commented

Parish said, “Completion of the chair’s statement is a basic requirement of good governance and we expect trustees to comply.

“We will enforce the law and impose a penalty where trustees fail to prepare an annual governance statement signed by the chair of trustees. These requirements apply equally to trustees of master trusts.

“These latest fines result from our ongoing focus on ensuring that trustees comply with the requirements of good governance.

“Trustees should be aware that this type of breach will result in a fine. We hope our latest report is a reminder to trustees to ensure they complete the chair’s statement fully and on time.”

Trustees are required to confirm that they have completed the chair’s statement via the scheme return. TPR is supporting trustees in numerous ways. This includes new web guidance and news-by-email to help them understand how to complete the new scheme return. This will include confirmation of completion of a chair’s statement, to demonstrate they are meeting new governance standards.

Corinthian’s preferred pension scheme, Salvus Master Trust, continues to not only meet, but excel the basic standards. It has achieved the Master Trust Assurance Framework (MAF) accreditation – the Pensions Regulator’s standard. The Salvus Master trust has also received a five-star rating (the highest) from Defaqto, the independent financial products’ researcher.