Ireland’s pensions regulator said some master trusts have been hard pushed to process the high volume of transfers coming into the new multi-employer arrangements – and warned that providers must maintain standards.
In its engagement and audit findings report 2023, the Irish Pensions Authority reported that several trustee boards had revealed their master trusts were currently under administrative pressure because of the ongoing consolidation of the defined contribution (DC) sector, which had led to the onboarding of a large number of transferring employers and members into master trusts.
“Trustees advised that in some cases this has resulted in delays, particularly in issuing disclosure information to members outside of contracted service level agreements,” the agency added.
It said it expected trustees to satisfy themselves that the administration standards of their master trusts were fit for purpose, and to take action if this was not the case.
“Trustees should engage with administrators to understand the details of any existing, or anticipated, issue or delay, that could impact on the provision of services to members,” it said.
By the end of October, according to the report, there were 17 master trusts registered with the authority, six of which had been established either at the end of 2022 or in 2023.
The multi-employer arrangements had a total of €17.7bn in assets under management, 20,822 participating employers, and around 400,000 scheme members – 277,000 active and 124,000 deferred.
Among observations from its engagement with the DC master trusts, the supervisor said it had discovered a wide variety of practices regarding support for retiring members.
“In one [master trust], members were provided with information on their impending retirement three months before their retirement date, whereas in another [master trust] members were given information on retirement several years before their retirement date,” it said, adding that it would keep the matter under review and expected to say more about its expectations here in 2024.
It also found varying practices around engagement with employers.
Overall, the Pensions Authority said the master trust sector was continuing to grow with increasing numbers of schemes of all sizes winding up and moving into master trusts and to Personal Retirement Savings Accounts.
Next year, it said it would focus more deeply on master trusts as part of the supervisory review process.
“Further, the Authority expects that [master trusts] will approach compliance in a more proactive way, rather than relying on sustained engagement and prompting from the Authority,” it said.
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