Category: Pensions · Reviewed by Amy Price, Account Executive · Last reviewed 2026-06-10
A master trust pension is an occupational pension scheme operated under a single trust deed for the benefit of employees of multiple unconnected employers. Each participating employer adheres to the trust on standard terms. Master trusts have been the dominant DC scheme structure for new workplace pension business since auto-enrolment commenced in 2012. Following abuses in the early market, the Pension Schemes Act 2017 introduced a mandatory authorisation regime supervised by The Pensions Regulator.
Category: Pensions Also known as: Master trust DC Statutory basis: Pension Schemes Act 2017 Related concepts: Workplace pension, Auto-enrolment, The Pensions Regulator, NEST National Employment Savings Trust
Master trusts include NEST (the government-sponsored scheme), Smart Pension, NOW: Pensions, The People’s Pension and provider-operated master trusts such as Aegon Master Trust, Aviva Master Trust, L&G Mastertrust and Standard Life Master Trust. Together they hold a substantial majority of post-2012 auto-enrolment DC assets.
Master trusts are occupational pension schemes under the Pension Schemes Act 1993 and Pensions Act 1995, but uniquely also subject to the authorisation regime in the Pension Schemes Act 2017. The Act requires master trusts to satisfy five authorisation criteria: fit and proper persons; financial sustainability; scheme funder; systems and processes; continuity strategy. The Master Trusts (Authorisation Application) Regulations 2018 (SI 2018/1030) provide the procedural detail. TPR has authorised approximately 35 master trusts to date.
Master trusts offer DC accumulation with default lifestyle funds (subject to the 0.75% charge cap), member self-service tools, retirement decumulation options, and (in many cases) integrated group risk cover. They are particularly attractive to small and mid-sized employers because they remove the burden of running an own-trust scheme.
A 60-employee firm uses Smart Pension as its workplace pension. Each year the firm pays its £30 per-member admin charge plus contributions, with employees enrolled into the default Future Strategy fund (charges 0.75%). The employer has no trustee responsibility because the master trust trustees are responsible for governance; the employer’s only duties are payroll, communications and annual declaration of compliance to TPR.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-10. Next review: 2026-12-10.
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