Stuart Reid, Director of Workplace Pensions at Smart Pension, talks about how master trusts are forecast to become the fastest-growing market segment over the next decade – and reveals his top five predictions for 2023.
Pension regulations and changes continue to mount up
The last few years have seen huge changes in the workplace pension marketplace. Single employer own trust pension schemes are moving to master trusts at the highest rates ever seen, a move that is being partially driven by the legislation affecting pension schemes with assets under £100m.
The value for money (VFM) requirement for occupational schemes with assets of less than £100m requires them to compare costs, charges and investment returns against three other schemes. This is driving change in the market because it serves to highlight to scheme sponsors the economies of scale that master trusts can provide.
At the same time, 2023 will most likely see the details start to emerge of how auto enrolment will evolve. Expect to hear about the entry age dropping to 18, and the removal of lower thresholds. Employers need to start thinking about this increase to pension budgets.
Last update: 10 January 2023
