Ten million now auto-enrolled in workplace pensions

Ten million people have now been auto-enrolled in a workplace pension since the scheme started in October 2012.

The government initiative was introduced to encourage people to start saving for their retirement at an early age.

Previously it had been up to the employee to decide whether or not to start a pension, but the new ruling means all employees are enrolled in a workplace pension by their employer unless they specifically decide to opt out.

Master trusts

Most large firms have their own pension scheme, but for smaller businesses the employees join together with those of other companies and put their savings in an organisation called a master trust.

The trust is then responsible for investing the contributions it receives on behalf of all its members and complying with all regulatory duties.


Almost a hundred master trusts were set up when auto-enrolment came into force, but many of them only attracted savers from a few companies and the government became concerned that they were too small to survive if there was a downturn in the economy.

The Pensions Regulator (TPR) executive director, Andrew Warwick-Thompson, warned at the time: “There is a risk of these schemes falling over – a risk that members might lose their money.”


To protect savers TPR established a set of standards which had to be met before a master trust would be authorised to continue operation.

Head of authorisation and supervision, Kim Brown, said: “The whole reason for authorisation is to drive up the standards in the market.

Better safeguards

She added: “Authorisation will create a market with better safeguards. To do that we need to set the standards which every master trust must meet to operate once they have been authorised, or set up in the market.

“We will also supervise these schemes to ensure that they continue to meet the authorisation criteria, are well-run and offer good value for members.”


To qualify for authority, trusts must pass the following criteria:

Fit and proper – Anyone with a significant role in running the trust must demonstrate they meet a standard of honesty, integrity and knowledge appropriate to their role

Systems and processes – IT systems must be in place to enable the scheme to run properly and it must have robust processes of administration and governance in place

Continuity strategy – A plan must be set in place to protect members if something happens which threatens the existence of the scheme, including how it would be wound up while protecting members’ savings

Scheme funder – Any scheme funder supporting the scheme must only carry out master trust business

Financial stability and business plan – The scheme must have the financial resources to cover running costs and also the cost of winding up if it fails, without any impact on members


This resulted in 49% of trusts already in existence either quitting the market place immediately or giving notice they intend to quit, but 46 remain in operation.

Before it can quit a trust has to find a buyer and finance the transfer of pensions at no cost to savers.


Only three trusts have been authorised so far, but 10 have been issued with application extensions and another 27 have applied. TPR is still awaiting a decision on six others.

The regulator is now considering the outstanding applications and evaluating whether they qualify for authorisation.