A master trust pension scheme has closed its doors to new business.
Yesterday My Workplace Pension changed the front of its website to larger banner which says: ‘My Workplace Pension is no longer accepting new members. Any existing members can contact support.’
The master trust did not say the reasons for it not accepting new business in its website statement.
The closure follows news last week that a discretionary fund manager (DFM) used by My Workplace Pension was set to close down.
Strand Capital is a DFM with £86 million in funds under management, which works with 10 IFAs and has an agreement with master trust My Workplace Pension.
After Strand Capital informed the Financial Conduct Authority (FCA) of its intention to close, the regulator and the DFM agreed to a number of restrictions on the firm.
These voluntary restrictions now appear on Strand Capital’s FCA register page, and say: ‘Strand must cease to carry on any regulated activity and any business activity that is carried on in connection with a regulated activity, or held out as being for the purposes of a regulated activity.
‘Strand must immediately secure all books and records and preserve information and systems that relate to regulated activities carried on by it, and must retain these in a firm and at a location,’ the note from the FCA said.
My Workplace Pension has been using Strand Capital as its investment manager for a number of its different funds, including its default fund.
When contacted by New Model Adviser® regarding Strand a spokesperson from My Workplace Pension said: ‘We are aware of the situation with Strand Capital and are taking action to ensure that the members of the My Workplace Pension Scheme are not adversely affected.’
New Model Adviser® understands that Strand Capital did not hold any money for My Workplace Pension and was only managing it. The amount of money in the workplace pension managed by Strand Capital was in the low single millions, according to sources close to the matter.
The new director of Strand Capital who has come in to help with the DFM being closed down is now working to help clients move to new investment providers.
Strand declined to comment.
This is not the first time which the master trust has appeared in the news; last February the BBC reported that My Workplace Pension was claiming on its website to have £50 million in pensions under management by Old Mutual Wealth.
However the master trust admitted to the BBC that it had none of these assets. Old Mutual said it was not handling any of this money and asked the firm to remove it from its website.
Master trust regulation
The government is about to create much tougher regulation for master trusts. It will soon pass the pension scheme bill, which is nearly finished going through parliament.
Measures in this bill include ensuring capital adequacy requirements and that master trusts must be authorised by the Pensions Regulator (TPR) before they are set up.
However presently the master trust market (which contains around 100 providers) has very little regulation, which has prompted concern, including from the former pensions minister Ros Altmann who said last year she was ‘shocked’ by the way master trusts had been set up without consumer protections in place.
Adrian Boulding, policy strategy director at Tisa, said the case of My Workplace Pension should be worrying for the master trust market as a whole.
‘I think this raises concern over whether or not the people who are running master trusts are fit and proper,’ he said. ‘Part of the authorisation regime which TPR will be applying once the bill has reached Royal Ascent is to ensure people running the master trust are fit and proper.
‘We are looking forward to the pension scheme bill, and looking forward to that becoming law. That will ensure that master trusts must become authorised by TPR and that will rule out any one who is not up to it.’