FOR ACTION

Planning ahead: Trustee succession and skills

New guidance on transferring to a master trust for smaller schemes

Respond to DWP’s pension transfer consultation by 21 July

Better disclosures, stronger governance

AI – what does it mean for the pensions industry?

INVESTMENT AND GOOD PRACTICE

Investment governance in master trusts: an evolving landscape

Supporting supervision through enhanced investment data

Long term asset funds: From policy intent to portfolio reality – what’s next for DC Pensions

Tokenisation of assets – what it means for master trusts

Sensitive Payments: What good practice looks like

INDUSTRY INSIGHT AND ENGAGEMENT

Share your insight on future challenges and opportunities with us

Inheritance tax reforms – what this means for pension scheme administrators

Master trust supervisors: Experts in their field

Supervisory Returns – Update

Pensions dashboards: Connection is just the start – prepare, learn, embed

Pensions Schemes Act 2026: Now the real work starts 

- Alyshia Harrington-Clark, Segment Lead, Commercial DC master trusts

After years of policy development and debate, it feels fitting to be writing the introduction to the first bulletin following Royal Assent of the Pension Schemes Act 2026. For many this has been a long time coming. For some, like me, it has been a companion across different roles, and it is gratifying to see the legislation begin to take shape in the real world.

It is important to recognise that this is a framework piece of legislation. Much of the detail that will ultimately shape outcomes for schemes and members will follow in secondary regulations, guidance, code (alongside coordinated FCA rules, where relevant). This means the immediate task is not wholesale change overnight but rather preparing for sustained implementation over the coming years.

The 2026 Act confirms a decisive shift for the DC market, and for the role of master trusts within it. Master trusts will be expected to operate at scale, prove delivery of good value, and provide support to members throughout their journey into retirement. They must also ready themselves to interact with a new small pot consolidation framework, all while continuing to evolve their investment offerings to meet the changing needs of members. Overall, we will see a more consolidated, transparent and outcome-focused market, a direction I hope you’ve seen mirrored in our Corporate strategy consultation.

I am encouraged by the progress made by industry, government and regulators which has led us this far. In a previous role at Pensions UK I was closely involved in shaping the DC content covered by the new legislation, working both in support of and challenging aspects of its development. Before that, at the FCA, I worked for years on competition and transparency in the institutional asset management market. I also worked for a stint in Europe on financial innovation in financial services intended to be supportive of growth. As a result, my path to TPR is shaped by a number of complex and familiar policy challenges, many of which I expect to see reflected again as we move to the next implementation phase. One clear lesson from my experiences is that debating and shaping policy is in principle hard work, but the real challenge will be delivering against it in practice.

So, I look forward to continuing to work with you all on this next phase. Look out for forthcoming ‘roadmap’ publications from DWP and TPR coming soon, setting out more detail on the implementation of the Pension Scheme Act 2026.

We have welcomed our new permanent Executive Director of Market Oversight, Ben Gunnee, who has joined us at an important point in this journey and brings a wealth of pensions experience, including roles within investment consulting, fiduciary management and private markets asset management. I also wish to extend my personal welcome to Emma Douglas, whom many of us from industry know well, and who will be our new Chair at TPR from this month.

As you would expect, we encourage you to engage with us through consultations and discussions as they continue throughout the next few years. By working with you collaboratively, we can make sure the detail of the regulatory framework takes the right shape for members. We will set out more about what you can anticipate in the coming months.

For master trusts the challenge – and opportunity – is to stay ahead of the curve through operational readiness, demonstrating value at scale, remaining resilient and developing credible propositions in an increasingly data-driven environment. I think getting this next part right will be what matters most. The 2026 Act may now be in place, but for you as for us, the real work is just beginning.

Planning Ahead: Trustee succession and skills

Planning ahead

The next five years will be a busy and demanding period for master trusts and the trustees who will be combining business-as-usual delivery, ongoing improvements, innovations and significant regulatory change, including the wide range of measures introduced by the Pension Schemes Act 2026. The cumulative effect of this is increasing pressure on trustee boards. Against this backdrop, now is an important time to consider whether boards have the necessary skills and experience, sufficient capacity and the resilience to deliver effective oversight in light of the growing demands and complexity. Strong board effectiveness is fundamental to achieving good outcomes for members and ensuring their interests are adequately protected.

For some schemes, this may mean considering whether board expansion or changes to operating models are appropriate to ensure the board can continue to be effective now and manage in the years ahead when these changes will take effect.

Succession Planning

Succession planning is a key part of effective governance. Not looking far enough ahead and planning for recruitment can introduce unnecessary risk, particularly during periods of change. A proactive approach helps ensure continuity of knowledge, stability in decision-making, and resilience in the face of unexpected departures, but also during periods of heightened demands.

Skills and capacity

The role of a trustee is evolving. Boards should regularly assess whether they possess the right mix of skills and collective competence to operate effectively, particularly in emerging and complex areas such as regulatory requirements, data and digital innovations, cyber security, investment governance, private markets, decumulation, and member engagement. Where gaps are identified this should play a key consideration during trustee recruitment exercises. We also expect trustees to undertake targeted training to address these needs.

Even where skills are present, trustees should also consider whether capacity constraints could limit their ability to oversee effectively. Identifying gaps early allows boards to prepare for change.

Regularly conducting independent skills and capacity assessments is good practice. These can provide valuable insight into whether the board is appropriately resourced and whether any knowledge gaps exist. Forward-looking training programmes, succession timelines, and periodic independent board effectiveness reviews can all help ensure the board is fit for future changes.

Key person risk

Key person risk continues to be a feature across the master trust industry (both at trustee level and core operational staff), this risk can be exacerbated where responsibilities are concentrated among a smaller number of individuals. Ensuring sufficient overlap in roles, encouraging knowledge sharing, and planning transitions carefully can reduce reliance on individuals and support smoother handovers. In some cases, increasing the size of the board or committee structures may also help distribute responsibilities effectively.

Resilience

Finally, building in contingency for unexpected absences is also essential to maintaining effective governance, particularly at a sub-committee level where there is more trustee concentration. There may be merits in rotating trustees on committees or allowing shadowing opportunities to mitigate against unexpected absences.

Taking time to review composition, skills and succession plans in advance of change will strengthen board resilience.

AI – what does it mean for the pensions industry

In May 2026 we published our artificial intelligence (AI) action plan setting out our approach to supporting the safe and effective use of AI in pensions.

AI offers significant opportunities to improve member outcomes but also introduces new risks including AI-generated scams, bias and increased cyber threats. We are clear that accountability for outcomes remains with trustees and scheme managers, regardless of whether decisions are supported by AI systems.

Our areas of focus to enable the safe adoption of AI are:

• Strong governance and oversight: ensuring schemes are well run and well governed. We will work with other regulators to align approaches and share best practice and emerging risks across the pensions sector and supply chain.
• Data foundations: continued engagement with schemes on data and ensuring our online content is high quality, so it is machine readable and easily ingested by AI models.
• Supporting and fostering responsible innovation: including through TPR's innovation service.
• Harnessing AI to become a more effective regulator.

Over the coming months, we will engage with schemes, advisers and providers to build a stronger evidence base on AI uses, impacts and risks, and to help develop our guidance - starting with a series of roundtables in the summer. We will report annually on our progress.

Frontier AI models and cyber risk

There have been numerous recent reports about a new AI model developed by Anthropic, designed to carry out extended sequences of complex actions autonomously to achieve user-defined goals. Claude Mythos (“Mythos”) is part of a wider set of ‘Frontier’ AI - advanced AI systems with capabilities beyond previous models.

Initial evaluation by the UK Government’s AI Security Institute found that Frontier AI can exploit systems with weak cyber security by discovering and exploiting vulnerabilities at speed. While Mythos has not yet been released publicly, this escalation in capability reflects a broader and rapidly accelerating trend. As AI capability grows, organisations with weak cyber resilience will be increasingly exposed. Trustees and scheme managers should therefore work with their suppliers and service providers to ensure:

• core cyber hygiene is in place (including effective prevention, detection and response measures)
• suppliers and service providers maintain robust controls
• consideration has been given to TPR’s Cyber Security guidance
  

At the same time, AI can strengthen cyber resilience, for example by improving anomaly detection or identifying fraud. Schemes should consider how AI can support the management of both cyber (and non-cyber) risks. You can find out more about AI and cyber security in the G7 briefing note published September 2025.

We continue to monitor the evolution of AI-enabled cyber threats and are working closely with government and regulatory partners, including the FCA and the Bank of England, to understand their impacts on pensions. We will issue further communications as needed. In the meantime, schemes should stay informed of developments in cyber threats through the National Cyber Security Centre’s (NCSC) reports and advisories, or by signing up to its Early Warning Service.

Master trust supervisors: Experts in their field

As the master trust (MT) landscape continues to develop, so too has the role of DC MT supervisors. Supervision has moved beyond traditional oversight, and is reflective of a more collaborative, expert-to-expert approach necessary as master trusts grow in maturity and complexity. The DC MT supervisors have significant experience in assessing governance, risk management and systems and processes and play a key role in assessing schemes across these areas and setting our risk based supervisory strategies.

How our experts can support you

Under the new ways of working, the role of the supervisors is to bring deep, multi-disciplinary expertise to their role, underpinned by strong knowledge of governance frameworks and operational practices. The team is highly experienced and has a wide knowledge base with backgrounds spanning from corporate and commercial law, pensions administration, government policy, financial planning, Financial Ombudsman services, global operations management and trusteeship. Collectively, the 15 DC MT Supervisors have over 90 years of experience here at TPR, with many involved from the master trust authorisation stage.

Focusing specifically on master trusts, our supervisory experience covers supervision of innovation, oversight of commercial activity and consolidation, supporting schemes to navigate untested legislation, setting precedents and responding to distressed operational situations. Our approach has shifted from a focus on compliance exclusively to constructive challenge, open dialogue and the ability to share insights and feedback. There is also strong cross-learning between Supervisors, alongside access to a wide range of specialists, including Policy, Legal, Investment Consultants, and Covenant and Financial Analysts. These interactions help support our work and enhance our engagement with schemes.

Building relationships and sharing insight

Supervisory relationships build a strong understanding of scheme-specific risks, governance frameworks, systems, processes and operational resilience, while also supporting trustees in navigating regulatory expectations and emerging developments. Supervisors are responsible for assessing these areas in line with our internal risk frameworks. They make sure our segment leads and senior stakeholders are briefed on key developments and ensure a consistent, proportionate regulatory approach is adopted. The supervisor assessments are enhanced by their visibility across the wider master trust market. This gives the Supervisor a unique perspective on evolving best practice as well as risk management and mitigations.

With so much regulatory change on the horizon, the role of the DC MT supervisor will remain pivotal combining senior expertise, market insight and collaborative engagement to support strong governance and good outcomes for members. They will continue to engage in their areas of expertise with schemes and will continue to encourage you to engage at an early stage when preparing for the significant developments required at schemes to deliver the Pensions Act and as schemes continue to scale.

Better disclosures, stronger governance

As master trusts continue to grow in scale and complexity, trustees are likely to need more detailed disclosures. Trustees are navigating an increasingly demanding landscape, and as investment strategies get more sophisticated, it is important that trustees receive the right level and quality of information. While we recognise the operational burden this creates, transparency and good governance are fundamental to member protection and trustee accountability.

Through our ongoing market engagement and supervision activity, we are working to share good practices and are calling on trustees to engage on these issues.

Sufficient

Trustees should consider whether the current reporting that they receive provides information that is material and useful rather than information that simply meets the basics of existing requirements. For example, trustees may need to have disclosure of underlying investments and fees in every portfolio, including fund of fund arrangements to be able to accurately assess true portfolio risk exposure and understand if layered fees are rewarding actual outperformance.

Trustees could also, where needed:

• Escalate formally and keep a record of the challenge and response where third parties cannot provide the level of detail requested, to identify any gaps or inconsistencies and enable strategic rather than reactive decision-making.
• Periodically review in total all disclosure outputs to ensure they are getting the information they need for oversight of complex portfolios.
• Map disclosures against member and stakeholder needs.

Consistent

Disclosures that cannot be compared or verified over time have limited value. This is especially relevant in private markets performance reporting, where consistent metrics are essential for maintaining clear and accurate oversight of true performance. Trustees may wish to consider whether their current reporting is sufficiently structured and evidenced to enable them to have that oversight. Investment into data quality and reporting infrastructure now will mean trustees are better placed to ensure credible governance.

Robust

Internal controls and reporting procedures need to be fit for purpose and need to develop in line with the changing complexity of Trustees' portfolios. Especially as allocations to private market assets grow, we anticipate that trustees will rely on transparency in disclosures to support decision-making.

Ways to ensure a sufficiently robust approach could include:

• Having disclosures reviewed by someone independent of those who prepared them.
• Planning ahead - building a roadmap to align the required reporting and controls to targeted developments.
• Ensuring the governance process and key risks are documented and reviewed accordingly.

Inheritance Tax reforms - what this means for pension scheme administrators

From 6 April 2027, significant changes will bring most unused pension funds and death benefits within a deceased member’s estate for Inheritance Tax (IHT) purposes, referred to by HMRC as “notional pension property”. Although Personal Representatives (PRs) will be responsible for reporting and paying IHT, scheme administrators will play a pivotal operational role.

Key facts

• Most unused pension funds and death benefits will be included in the estate for IHT.
• Death-in-service benefits remain excluded.

• Exemptions continue for spouses, civil partners and charities.
• PRs may instruct schemes to:
  - withhold up to 50% of benefits
  - hold funds for up to 15 months
  - pay IHT directly to HMRC.

• Beneficiaries may be jointly liable for IHT once benefits vest.
  
  

Operational implications for administrators

Administrators will play a critical operational role in supporting PRs. Administrative timescales will directly influence IHT liability, timelines and stakeholder risk as IHT is generally payable within 6 months of death, creating a dependency on timely administration.

Administrators will need to:

• Provide accurate and timely valuations and beneficiary data to support PRs.
• Have robust controls, audit trails and validation processes in place for withholding benefits and making IHT payments to HMRC.

• Prepare for formalised information-sharing requirements via secondary legislation.
• Ensure communications with beneficiaries are clear and consistent, recognising that their decisions can directly affect tax outcomes and may expose them to legal and financial detriment.

While administrators will carry out the operational aspects, trustees and scheme managers retain ultimate accountability for oversight, regulatory compliance and delivering the right outcomes. Administrators should expect trustees of the schemes that they administer to have a keen interest in what steps are being taken to ensure that the administrators are ready for these changes.

New guidance on transferring to a master trust for smaller schemes

The Pension Schemes Act 2026 has now become law. This means we are one step closer to several new legislative requirements for most defined contribution (DC) schemes. We’re encouraging trustees of smaller DC schemes to consider their scheme’s future in light of these additional requirements, which may include consolidating into a master trust or winding up.

That’s why we’ve published:

• a new Pension Schemes Act 2026 page on our website that provides a summary of the new requirements and will be updated as more detail becomes available
• new guidance for smaller defined contribution schemes considering a transfer to a master trust 
• updated guidance for transferring or winding up a defined contribution scheme 
• a blog from Kim Goodall-Brown setting out the changes the Pension Schemes Act 2026 will bring

The new guidance acknowledges that making the decision to consolidate isn’t always straightforward for smaller schemes, who may face more barriers. We’ve included case studies to demonstrate how master trusts can support smaller schemes, such as providing support with costs and improving data quality.

Master trusts that are open to calls from smaller schemes

We’ve created a list of master trusts that are open to enquiries from smaller schemes – to help those interested in transferring take the next step.

We’d like to thank the master trusts who contributed case studies for the guidance and those that agreed to be included in the list of schemes open to enquiries from smaller schemes.

Last month, we emailed schemes providing DC benefits that are likely to need to implement the expected Pension Schemes Act 2026 changes, including links to key guidance. As a result, you may see an increase in enquiries from these schemes.

In the coming months, we plan to engage with the master trusts on the list of master trusts open to enquiries from smaller schemes to gather feedback on their experiences.

If you’d like your master trust to be on the list, please contact: sedc_supervision@tpr.gov.uk or your scheme supervisor. Terms of use apply.

Share your insight on future challenges and opportunities with us

Our corporate strategy consultation sets out a vision that everyone receives a sustainable income in retirement. Delivering on this vision means ensuring the pensions system works effectively for members at every stage, and that requires us to draw on the collective expertise, data and experience of the industry.

With this in mind, we have been engaging closely with stakeholders to better understand the challenges and opportunities across the market.

In a recent session with Sackers (pictured below), we explored the practical barriers to consolidation. The discussion provided insight into the challenges that non-master trust schemes face when seeking to consolidate with master trusts.

A key theme was the difficulty posed by legacy products and non-standard benefit structures. While solutions do exist, they are often operationally complex and costly to implement.

Additional member-level factors, such as the potential loss of tax protections, with-profits funds, and investments with guaranteed returns further complicate the decision on whether to consolidate (as discussed in more detail in the above article). As a result, no consistent market-wide solution currently exists, and there is a need to explore more innovative approaches.

Supporting members does not stop at accumulation. In a separate session with LCP (pictured below), on the development of Guided Retirement solutions, the current challenges and how the market may evolve to better support members through decumulation were discussed.

And in another session, Priti Ruparelia, from Independent Governance Group (IGG), together with Shayala McRae, from LCP, delivered an insightful discussion on the ethnic minority pensions gap and how pension outcomes are shaped by the intersection of gender and ethnicity.

We will reflect on these insights as part of our ongoing work. Engagements like this are important in helping us understand the challenges the market is facing and where TPR may need to focus on in future.

We are keen to continue bringing industry perspectives into TPR and encourage trustees, advisers and administrators to engage with us. If you have insights you’d like to share, please get in touch with us at engagement@tpr.gov.uk.

Supervisory Returns - Update

Last year, with the aim of reducing unnecessary regulatory burden, we paused the requirement for trustees to submit the annual Supervisory Return for master trust schemes, this is in line with our sharper focus on member outcomes. We can confirm that this requirement remains paused, with no immediate plans for reintroduction.

This position will continue to be kept under review, and sufficient notice will be provided should the requirement be reintroduced.

Sensitive Payments: What Good Practice Looks Like

The way administrators handle sensitive payments can have a big impact on members and their dependents and should be considered with additional care. Payments linked to bereavement, serious ill-health, vulnerability or error correction require more than routine processing – they demand judgement, empathy and strong controls. Good practice starts with early identification. Administrators should apply clear criteria to flag sensitive cases and manage them through appropriate processes. For cases where a need for increased human touchpoints is identified, allocating these cases to separate specialist teams or experienced, empathetic staff helps to ensure appropriate oversight and consistency.

Sensitive payments should be treated as higher risk, higher impact activities. Many good practice examples have been identified through our engagement with master trusts and their administrators. These include:

• Having a single point of contact for members: Knowing there is someone the member or their representative can speak to who is familiar with their circumstances has been found to be beneficial and reduces further distress.
• Applying proportionate controls: This will ordinarily include dual authorisation for sensitive or high value payments, and clear segregation of duties. For any exception payments, such as urgent compassionate payments, documented approval processes should be in place.
• Supporting vulnerable members: Systems and processes should be in place to recognise vulnerability, for example due to bereavement, illness or financial hardship, and reasonable adjustments should be available as needed.
• Handling errors sensitively: Where payments are incorrect, a root cause analysis should precede any action. Overpayment recovery should be proportionate and considerate of individual circumstances, while underpayments should be corrected promptly and clearly explained.
• Keeping clear records: Decisions relating to sensitive payments should be well documented, with targeted quality checks in place. Learning from these cases should feed into ongoing training and process improvement.

Respond to DWP’s pension transfer consultation by 21 July

To strengthen protections against the threat of pension scams, and to make the system smoother, the Department for Work and Pensions (DWP) has launched a consultation on proposed amendments to transfer regulations. We strongly encourage the master trusts to read the proposals and respond before the deadline of Tuesday 21 July 2026.

The consultation proposals target genuine risks precisely, removing unnecessary friction without weakening safeguards and include:

• Extending red flags by introducing a new red flag (that can pause or block a suspicious transfer) where a transfer is proposed and the evidence provided does not demonstrate an employment link with the proposed receiving scheme. Although the proposed change is aimed at addressing concerns in relation to SSASs in particular, it will apply to all transfers.
• Enabling a 'green list' of receiving schemes. Trustees would be able to operate a list of receiving schemes for which they have no scam concerns, streamlining transfers where the risk of fraud is low and allowing schemes to focus their scrutiny on higher-risk cases.
• Exemptions from MoneyHelper guidance appointments in cases where members are consolidating multiple pension pots, within 12 months of their last appointment.

Why this matters

The Pension Scams Action Group (PSAG), led by TPR and bringing together the DWP, law enforcement agencies, the pensions industry, and other key partners, works continuously to identify emerging threats and co-ordinate action against fraudsters.

The proposals reflect the intelligence and insight gathered through collaborative work, including TPR’s prominent role in discussions around the inclusion of SSAS schemes within the ‘red flag’ safeguards – a subject we focused on in a recent blog.

Our Executive Director of Enforcement & Executive General Counsel, Gaucho Rasmussen said: "Fraud wrecks lives – and tackling it demands strong, coordinated action. The targeted safeguard proposed is an important step forward… we urge trustees and administrators to have their say."

Torsten Bell MP, Minister for Pensions, added: "Too often we see fraudsters trying to trick workers into transferring their savings into bogus pensions. We are stepping in to automatically block transfers where the warning signs are flashing red.”

Supporting supervision through enhanced investment data

We would like to thank all master trusts for their time, effort and cooperation in contributing to the investment data collection exercise as at 31 December 2025. Your engagement was instrumental in delivering a robust dataset, and we appreciate the constructive approach taken. This data will play an important role in our supervision of schemes, by providing better understanding of investment strategy and risk-adjusted performance. A publication from this exercise focussing on asset allocation will follow, and we will notify schemes in advance of its release.

A key area of learning from the exercise was the challenge in providing the “total in accumulation” asset allocation metric (which captures investments across all members before retirement). This was a common issue across several schemes and reflects that it is not typically part of reporting frameworks. However, through engagement, we were able to capture this data point for the majority of schemes. The experience has provided insight and will help inform greater clarity in future exercises.

Feedback received from schemes is encouragingly positive and the exercise has assisted them with preparation for value for money (VfM) requirements that are set out in the Pension Schemes Act 2026. TPR will be considering how it can use the information to inform policy creation around VfM, as well as how it can assist schemes to prepare for their duties under the legislation while continuing to encourage schemes to engage with VfM as it develops.

Investment governance in master trusts: an evolving landscape

Investment governance models are evolving as master trusts grow in scale and investment strategies become more sophisticated. Greater use of alternative assets highlights the need for deeper technical understanding and stronger oversight, while larger asset pools enable more complex implementation approaches. Commercial dynamics and wider business offerings also continue to play a role in determining the investment governance approach taken.

Against this backdrop, we see three main investment governance models developing:

1. In house with delegation: A large in house team advises trustees and implements decisions. External advisers may be used for additional expertise. This approach can be agile and cost efficient, often for larger schemes who benefit from economies of scale.
2. Affiliated manager models: Investment management or decision making is delegated to an entity within the Provider's group. This can be efficient and aligned with broader business but requires clear conflict management and robust challenge.
3. Outsourced models: Investment decision making and implementation is contracted out to independent advisers or managers. Outsourcing can provide access to whole of market ideas, though may be potentially slower in terms of decision making.

Getting it right

Regardless of the model taken, high quality investment governance should demonstrate:

• Clear accountability and decision rights, with conflicts of interest identified and managed accordingly.
• Documentation of investment beliefs, risk frameworks and delegation limits.
• Trustee ability to oversee decisions and challenge where needed.
• Consideration of a broad range of investment opportunities.
  

Importantly, investment governance is a risk management tool to be actively embedded in decision making, rather than existing only on paper. As the market evolves, we expect governance frameworks to continue to adapt.

Our December 2025 Bulletin included an article on Strengthening Investment Governance and Risk Frameworks as a call to action for trustees to strengthen investment oversight, enhance resilience, and ultimately safeguard member outcomes.

Tokenisation of assets – opportunities and risks for trustees to consider

Tokenisation is an emerging tool that could reshape how pension schemes invest. It refers to the process of representing ownership rights in real world assets into digital tokens recorded on a distributed ledger (typically blockchain). These tokens represent interests in the underlying asset and can be transferred electronically, potentially enabling more efficient trading, settlement, and record keeping.

A wide range of assets can be tokenised. Financial instruments such as equities, bonds, and funds are increasingly explored, alongside real assets like real estate, infrastructure, and commodities. Private market assets are a key focus, as tokenisation may allow fractionalisation and broader investor access.

Tokenised funds are already available

Tokenised money market funds and other tokenised fund structures already exist. In these, fund units are issued as digital securities on a blockchain rather than traditional registers. The market is evolving quickly, with asset managers increasingly launching regulated tokenised products and pilots moving towards mainstream adoption.

Potential benefits:

• Operational efficiency: faster settlement and automated administration.
• Fractional ownership: enabling access to private assets at smaller ticket sizes.
• Improved liquidity management: better handling of cash flows and collateral.
• Transparency and auditability: from immutable ledger records.

Key risks and considerations:

• Regulatory uncertainty: frameworks are still developing.
• Technology and cyber risk: reliance on blockchain infrastructure.
• Legal and governance complexity: especially around ownership rights and custody.
• Liquidity risk: secondary markets remain immature.

FCA discussions

FCA has already expressed support for firms in their adoption of tokenisation, setting out a shared vision alongside the Bank of England and opening a discussion on key principles for regulation and infrastructure to facilitate its development.

What does this mean for master trusts?

Tokenisation use is expanding across financial services and has the potential to change how DC funds are structured, improving efficiency and access to a broader range of investments. Trustees should assess this evolving technology carefully, ensuring they remain mindful of their duties and applicable regulatory frameworks, and seek professional advice as required.

We encourage trustees to stay informed about developments in this area, remain alert to emerging opportunities, and undertake relevant training where necessary to build understanding and capability.

Long term asset funds : From policy intent to portfolio reality – what’s next for DC Pensions

The Long Term Asset Fund (LTAF) market’s growth momentum continues. According to the FCA, there are currently 40 authorised LTAFs, including sub-funds, launched by about 14 providers. Morningstar’s report, Public/Private Convergence: LTAF Landscape (April 2026), estimated that at the end of 2025, LTAFs accounted for £7.3 billion of AUM, up from £5 billion in mid 2025, with a further £3.1 billion of committed capital. The investor base is dominated by DC pension schemes, but retail investors are now allowed to invest in LTAFs within Stocks & Shares ISAs from 6 April 2026.

The LTAF universe is heterogeneous, with significant variation in approach and implementation, which makes comparison difficult. Below are a few examples:

• Multi asset and private debt LTAFs dominate, but there are also a number of single asset LTAFs focused on infrastructure, property, venture capital, and private debt.
• Some are still under £100 million, while others have crossed the £1 billion AUM mark.
• Lock-up periods range from 12 months to five years.
• Fee structures may include a flat fee, performance fees, and different hurdle rates.
• Some are set up exclusively for DC, while others target wealth and retail participation.

Implications for governance and monitoring

For trustees, the key issue is how an LTAF can be monitored with sufficient rigour over time. Here we highlight several areas which merit explicit attention.

• Manager concentration
  Where a large proportion of an LTAF’s underlying sleeves are managed in-house, it may be helpful to consider the manager’s breadth of expertise and capacity across all components. Unlike a DB scheme, where an asset class allocation is often spread across two or three managers, a DC arrangement can sometimes result in multiple private market mandates being allocated to a single manager, which could increase manager concentration risk. In this context, schemes may wish to consider the potential benefits of diversifying manager exposure, whether within or outside the LTAF structure.
• Deployment of assets
  Given that many LTAFs are still relatively new, it may be useful for trustees to monitor how effectively capital is being deployed. A concentration of DC inflows into a limited set of providers may contribute to slower deployment.
• Look for more transparency in LTAF reporting
  Private markets reporting, including for LTAFs, can vary materially across managers. This makes it harder to exercise judgement on issues such as valuation, performance, liquidity capacity, capital deployment, and fee look-through. Trustees should therefore require reporting that goes beyond marketing-led summaries.
• Investor base evolution
  The investor base is also changing with the extension of access to retail channels. Trustees should consider whether growing participation by wealth and retail investors could alter the risk profile of an LTAF. Blended DC and retail participation may introduce more volatile and procyclical cashflows, increasing the likelihood of gating, particularly in stressed markets.
• Leverage
  Although the majority of LTAFs today do not appear to use direct leverage, some managers have credit facilities in place to manage potential short-term liquidity needs, according to Morningstar. LTAFs are also generally permitted to borrow up to 30% of their NAV (Net Asset Value), and leverage could be embedded within some of the underlying funds. While borrowing can support portfolio management, trustees should be mindful of potential layered leverage and its implications in stressed market conditions.
  

Scale and investment capabilities evolution

While many LTAFs are still in the early stages and many are relatively small. Over time, it may be helpful to consider how these funds evolve as they scale, including building out the team and the development of capabilities in areas such as deal origination, due diligence, cash-flow management, and risk oversight. In this context, the pace and effectiveness with which LTAFs build out these capabilities could have implications for operational resilience and longer-term outcomes.

• Fee complexity
  The headline LTAF fees may not necessarily reflect the full cost stack of running an LTAF, which can include transaction, financing, administrative, and performance or carry-related fees. In addition, alignment of interests, or making sure that managers are incentivised to deliver alpha, is also an important consideration. Read our article on performance-related fees.
  

Lastly, trustees should assess their own governance capabilities and ensure the board has access to the investment and legal advice needed to understand the structure and risks, while documenting where professional advice is relied upon. For further information, read our Private markets investment guidance.

Pensions dashboards: Connection is just the start – prepare, learn, embed.

The majority of master trusts are now connected, but it’s important to remember that connection is the first milestone in the dashboards journey. Post-connection, you need to stay focused on data. Dashboards will only work for members if the data returned to them provides recent and accurate information about the value of their pensions.

Now is the time to improve and enhance your data quality, not just to satisfy dashboards requirements, but as part of a wider journey of digital and data-driven transformation. High-quality, well-governed data underpins accurate administration, effective automation, cyber resilience and ultimately trust in the pensions system. Managing data quality is not a one-off activity.

Ahead of connection and in advance of the public launch of dashboards, we’re doing all we can to support schemes to address the risks of poor-quality data. Read on to understand how our engagement with industry has shaped our guidance, and to access the resources you need to be dashboards-ready.

Market oversight report: Findings and what they mean for you

We recently published our pensions dashboards market oversight report, put together from the deep dive research we completed last summer, looking into the data practices of the UK’s largest schemes. Thank you to all schemes that assisted with this.

The insights we gained have given us a strong picture of the current landscape. Here’s what we learned:

• The majority of large schemes are already connected to dashboards – with 85% of schemes now connected - and schemes’ efforts continue on data preparations.
• Personal data work is ongoing. Many schemes are still improving the quality of the data used to identify dashboard users, putting in place processes to resolve ‘possible’ matches, and processes to review and refine their matching criteria.
• Value data preparations are less advanced in comparison to personal data, with significant work still required to ensure information sent to members is accurate, up to date and dashboards-ready.
• Data quality controls exist but must mature, with schemes needing to embed data improvement, monitoring and assurance into business-as-usual activity rather than treating it as a one-off exercise. High-quality data underpins good member outcomes, not just dashboard compliance. It is fundamental to running a scheme well. Read our scheme member data guidance for updated examples of actions that can be taken to assess, review and continually improve data quality.

Read the full market oversight report for more information: 

New and updated resources

The findings from the report have directly informed the updates to our Pensions dashboards guidance. We recommend reading the report and guidance alongside each other. The updated guidance reflects current industry experience, MaPS digital architecture progress, and clarification on frequently asked questions.

With industry now falling into two distinct areas of pre and post connection, we've updated our checklist resource. Schemes now have the option to download a pre or post connection checklist, based on where they are in the journey. Don't worry if you have been using our original checklist, the actions are still relevant.

Three things every master trust should be doing now

Alongside the new resources, we recently ran an industry-facing campaign to bring everything together and highlight three areas where action now will have the biggest impact:

1. Value data readiness
   Being dashboards ready is about more than successfully matching members to their pensions. Schemes also need to be able to return accurate, reliable and up-to-date value data to members. Getting this right early will help prevent a spike in member queries and support members in making more informed retirement decisions.
2. Post connection duties
   Connection marks the beginning, not the end, of dashboards responsibilities. Trustees and administrators will need to maintain momentum and embed dashboards activity into business-as-usual processes. The newly updated checklist resource helps schemes plan ahead and support informed conversations at every stage.
3. Test and learn
   Once connected, schemes have a valuable opportunity to test processes with real users while user volumes are low. Using this period to identify and resolve issues early will help ensure smoother operations once the dashboard is launched to the public.

Regulatory initiative

In April, we launched a regulatory initiative (RI) which targets the value data preparations of medium and small DB and hybrid schemes.

The new RI will assess how these schemes are preparing to meet their dashboards duties, with a particular focus on the readiness and accuracy of value data. Insights from this work will help inform discussions on the timing of the launch of the MoneyHelper dashboard.

Join us tomorrow for our final webinar before the deadline

Our last webinar before the October connection deadline takes place tomorrow, Wednesday 8 July at 2:30pm. The webinar features experts from Pensions Administration Standards Association (PASA) and MaPS covering current industry priorities, practical learnings from testing and industry preparations, and a live Q&A. If you can't make it on the day, register anyway to submit a question to the panel and receive the recording.

94% of respondents found the December webinar valuable.

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