New guidance on capital reserves will unlock millions for master trusts, says TPR

The Pensions Regulator (TPR) said new guidance on capital reserves for master trusts could unlock millions of pounds for investment as the defined contribution (DC) master trust market grows and new laws come in.

TPR reviewed its approach to keep regulation effective for members, while cutting unnecessary burdens and supporting economic growth. 

The new rules will let some master trusts lower their cash reserves and use a more efficient mix of assets to meet capital requirements. 

TPR said it made these changes as part of Government plans to reduce regulatory burdens and support the economy.

Kim Goodall-Brown, director of DC and master trust supervision at TPR, said: “Over the last seven years, we have learnt much about how the market is operating. 

“As the pensions landscape evolves and master trusts continue to grow, it is important that we continue to evolve our approach. 

“We have been clear that we want master trusts to be well run and well governed with trustees and scheme decision-makers empowered to make the right decisions for them.”

Goodall-Brown added: “At the same time, we want to strip back unnecessary regulatory burden so that schemes can free up capital for productive use and focus on delivering the best possible outcomes for members.”