The United Kingdom's Pensions Regulator published a report setting out an evolved approach to supervising the defined contribution (DC) and master trust market following a 12-month review, aiming to identify market and saver risks earlier and sharpen the focus on member outcomes and value for money. The shift comes as the master trust market has matured under the 2019 authorisation framework, with 33 authorised master trusts now holding around nine in 10 trust-based DC pensions. Under the new model, schemes will be supervised through four segments, with tiered engagement calibrated to the risks each presents to market and saver outcomes: monoline master trusts, commercial master trusts, non-commercial master trusts, and collective defined contribution schemes and single-employer trusts. Every scheme in the monoline and commercial segments will be assigned a dedicated multi-disciplinary team of named individuals covering financial analysis, business strategy, investment and governance. Supervision will rely more on open dialogue and real-time data, with fewer but more targeted data requests and more focused expert-to-expert meetings. A 14-week pilot with three large master trusts found the approach improved regulatory outcomes, enabled clearer supervisory expectations and more robust decision-making, and surfaced scheme-specific and sector-wide risks more effectively while reducing burden through more targeted information requests.

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