Triggering event duties
If you are involved with a master trust, you may have a duty to notify us about certain triggering events. These events may indicate that the scheme cannot continue to operate. You also cannot increase or introduce new member charges during a triggering event period or accept new employers into your scheme.
There are six duties that relate to triggering events.
1. Notify a triggering event to us
If a master trust experiences a triggering event, there are notification duties for trustees, scheme funders and scheme strategists. Some duties require notification within seven days of the event occurring, while others have to be notified within seven days of the person becoming aware of the triggering event. If the master trust scheme experiences more than one event, each event must be notified separately. If you are unsure whether a triggering event has occurred you should consider seeking your own independent legal advice.
Complete the triggering events form (PDF, 101kb, 9 pages).
The table below sets out the triggering events with a description of the corresponding notification duties and who is responsible for notifying us. Download guidance on identifying and reporting triggering events.
| Triggering event | Description | Who must report | Required notification date |
|---|---|---|---|
| 1 | We issue a warning notice in respect of a decision to withdraw the scheme’s authorisation (standard procedure) | This trigger event comes about through our actions, therefore we do not require a notification that a triggering event has occurred. | |
| 2 | We issue a determination notice that the scheme’s authorisation is withdrawn (special procedure) | This trigger event comes about through our actions, therefore we do not require a notification that a triggering event has occurred. | |
| 3 | We issue a notification that a scheme is not authorised (master trust operating without authorisation) |
This trigger event comes about through our actions, therefore we do not require a notification that a triggering event has occurred. |
|
| 4 | Insolvency event occurs in relation to scheme funder |
Scheme funder Trustees and a scheme strategist if they become aware the event has occurred |
Before the end of seven days starting with the date the event occurred. Before the end of seven days starting with the date the person notifying became aware the event has occurred. |
| 5 | Scheme funder unlikely to be able to continue as a going concern |
Scheme funder Trustees and a scheme strategist if they become aware the event has occurred |
Before the end of seven days starting with the date the event occurred. Before the end of seven days starting with the date the person notifying became aware the event has occurred. |
| 6 | Scheme funder decides to end the relationship with the master trust |
Scheme funder Trustees and a scheme strategist if they become aware the event has occurred |
Before the end of seven days starting with the date the event occurred. Before the end of seven days starting with the date the person notifying became aware the event has occurred. |
| 7 | Scheme funder ends the relationship with the master trust |
Scheme funder Trustees and a scheme strategist if they become aware the event has occurred |
Before the end of seven days starting with the date the event occurred. Before the end of seven days starting with the date the person notifying became aware the event has occurred. |
| 8 | Scheme funder, scheme strategist or the trustees decide that the master trust scheme should be wound up |
The person or persons who take the decision Trustees, a scheme funder and a scheme strategist if they become aware the event has occurred |
Before the end of seven days starting with the date the event occurred. Before the end of seven days starting with the date the person notifying became aware the event has occurred. |
| 9 | An event has occurred which allows or requires the master trust to be wound up | The trustees, a scheme funder and a scheme strategist if they become aware the event has occurred |
Before the end of seven days starting with the date the person notifying became aware that the event occurred. |
| 10 | The trustees decide that the master trust scheme is at risk of failure so it is necessary to follow continuity option 1 or 2 |
The trustees A scheme funder and a scheme strategist if they become aware the event has occurred |
Before the end of seven days starting with the date the event occurred. Before the end of seven days starting with the date the person notifying became aware the event has occurred. |
2. Duty to submit implementation strategy
When a master trust experiences a triggering event, the trustees must either:
- transfer out all members and wind up (continuity option one)
- resolve the triggering event to continue operating (continuity option two)
Download guidance on how to follow the continuity options. Download a flowchart mapping continuity option one (PDF, 32kb, 1 page).
The trustees must submit an implementation strategy to us within 28 days of the triggering event (or a decision to refuse or withdraw authorisation becoming final), setting out which continuity option they will follow and their plan to do so. Download an implementation strategy template (DOC, 750kb, 8 pages).
3. Charge restrictions during a triggering event period
During a triggering event period you must not:
- increase charges on or in respect of members
- impose new charges on or in respect of members
- impose charges on or in respect of members as a consequence of leaving or deciding to leave the scheme
A triggering event period starts from the date that the triggering event occurs until either:
- we are satisfied that the event has been resolved
- the members’ benefits have been moved to a different arrangement and the scheme has wound up
See Complying with the charges prohibition during a triggering event period for more information.
4. Charge restrictions on schemes receiving transfers
Your master trust may receive transfers from a scheme that has experienced a triggering event. If this happens you cannot increase or impose new charges on or in respect of members to cover:
- costs incurred by the transferring scheme
- costs that relate to transferring those members’ rights
5. Prohibition on taking on new employers
During a triggering event period the trustees, strategist and funder must not:
- allow a new employer to join the master trust
- enter into an agreement with a new employer to join the master trust after the triggering event period
A penalty can apply if new employers are allowed to join.
6. Resolving a triggering event
Once trustees following continuity option two are of the opinion that a triggering event has been resolved, they need to tell us within 14 days beginning with the date the triggering event was, in the trustees’ opinion, resolved. The notification must set out how the trustees consider the triggering event has been resolved. We will assess the facts and issue a notice to the trustees to confirm whether we are satisfied that the event has been resolved.
Complete the resolved triggering event form (PDF, 104kb, 10 pages).
Scheme engagement
We will engage with all schemes that experience a triggering event. We will discuss how you plan to resolve the event or transfer members to a different master trust and wind up the scheme.
We expect you to engage with us in an open and cooperative way. We are aware that the particular circumstances of a scheme will present different types of risks. We will take this into account when deciding how we will engage with schemes.
While we will usually request information on a voluntary basis, we are able to exercise formal information gathering powers to require information to be provided, and attendance at an interview with us to explain the information supplied.
If you don't comply
Failing to comply with your duties may result in a penalty of up to £5,000 for an individual and £50,000 in any other case.
When we consider whether to impose a penalty and the level, we will apply our risk-based approach and take into account the relevant facts of the case. For further information about the factors we generally consider when deciding whether to take enforcement action, see our master trust supervision and enforcement policy (PDF, 224kb, 23 pages).