The growth of master trusts has been driven by the introduction of automatic enrolment in 2012 and in 2018 the Government introduced a regulatory framework which meant only master trusts authorised by TPR were permitted to operate.

Neil Bull, TPR’s executive director of market oversight, said following the completion of this process the regulator would now be shifting its focus.

He said: “Value has to be the guiding light for all that we do. For our engagement with master trusts that means: A focus on investments. A focus on data quality and standards. And a focus on innovation at retirement.”

Bull added he wanted master trusts to see their relationship with TPR as a partnership, which mitigates harms, identifies opportunities for savers and delivers value.

He said TPR would:

• probe and challenge more on how a master trust’s approach to investments delivers for savers
• investigate how a master trust is seeking the best possible long-term risk-adjusted returns
• look more broadly at master trust investment governance practice and investment decision making
• request deep dives into the systems and processes of master trusts.

Bull said: “Our visits need not be cause for concern but seen instead as a learning opportunity for us both. This will mirror the activity we see in the private sector when master trusts showcase their offer to employers explaining their operations.”

Among the problems cited by the government is the fact many of the millions of members of master trusts have not made an active choice to save, because auto-enrolment has used defaults to harness the power of inertia.

This means 94 per cent of master trust memberships are within the default investment strategy.

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