I beg to move

That the Occupational Pension Schemes (Master Trusts) Regulations (Northern Ireland) 2024 be approved.

Thank you, Minister. The Business Committee has agreed again that there should be no time limit on this debate.

This rule is the current replacement of the original regulations, which came into operation on 6 April 2022. The rule provides for the authorisation and supervision regime for master trust pension schemes under the Pension Schemes Act (Northern Ireland) 2021, which corresponds to provision for Great Britain in the Pension Schemes Act 2017.

A master scheme is one that must be used by more than one employer, provides money purchase pensions, and is not a public-sector scheme or used by only connected employers — for example, by one profession or group of companies. Many employers have chosen to enrol their workers into a master trust scheme rather than setting up their own pension scheme. That led to a considerable expansion of the master trust market.

Master trust scheme structures create specific risks that were not addressed by the legislation, which was designed for other types of pension scheme. The regulations aim to address the potential impact of the risks for master trust scheme members by providing an authorisation and supervision regime administered by the Pensions Regulator, which operates UK-wide. The authorisation regime requires all master trust schemes to be authorised by the Pensions Regulator. The Pensions Regulator's ongoing supervision regime will ensure that master trust schemes continue to meet the authorisation criteria. It also gives the regulator greater powers to engage with and, if appropriate, intervene if a master trust scheme is in danger of failing to meet the authorisation criteria. The Pensions Regulator will assess each master trust scheme against authorisation criteria aimed at addressing the risks specific to master trusts. Those include that the persons involved in running the scheme are fit and proper, and that the scheme is financially sustainable. Once authorised, master trust schemes are required to continue to meet the authorisation criteria.

These regulations also set out requirements relating to the Pensions Regulator's supervisory role. The regulator can withdraw authorisation if it is no longer satisfied that the authorisation criteria are met. The regulations set out further detail on information to be provided to the regulator while the scheme is running, which will help the regulator to consider whether it is satisfied that the authorisation criteria for schemes continue to be met. Where a person fails to comply with a request for information, the Pensions Regulator can impose fixed and escalating penalties that are broadly consistent with other penalties that can be imposed by the regulator. The regulations provide more detail about the actions that trustees must take if a scheme experiences a triggering event. The Pensions Regulator will work with the scheme to ensure that appropriate action is taken at each stage, including notifying employers and members about what has happened and what their options are if the scheme is going to wind up. Restrictions on charges in the Act mean that additional costs cannot be passed on to members.

In summary, these regulations introduce a robust authorisation and supervision regime for master trust pension schemes.

On behalf of the Committee, I support the introduction of the regulations. The Committee considered the rule on 11 April 2024. Committee members understand that the regulations set out the authorisation and supervision regimes for master trust pension schemes, which have grown considerably in the past few years.

The regulations are designed to revoke and re-enact the Occupational Pension Schemes (Master Trusts) (No. 2) Regulations (NI) 2023, ensuring continuity and robustness in the governance of master trust pension schemes. Committee members were made aware that the master trust market had grown significantly, driven by the automatic enrolment duty introduced by the Pensions Act 2008. Master trust schemes provide a collective pension solution for multiple employers. They particularly benefit smaller employers that cannot set up their own pension schemes. The expansion, however, has introduced specific risks that previous legislation did not address.

I turn to the key features of the regulations. Committee members noted that the regulations propose improvements in a number of areas. First, the Committee welcomed that the regulations established an authorisation and supervision regime for master trust schemes, overseen by the Pensions Regulator. All master trusts must apply for authorisation and demonstrate that they meet rigorous criteria related to governance, financial sustainability and operational processes. Secondly, only individuals deemed to be "fit and proper" can be involved in running the schemes in order to ensure high standards of integrity and competence. Thirdly, master trust schemes must show financial sustainability. There are specific provisions for schemes with and without scheme funders. That ensures that schemes can cover their costs and protect members' assets. The regulations provide that adequate systems and processes must be in place to ensure effective scheme management, including robust administrative procedures and risk management frameworks. Those should include a continuity strategy that details actions in the event of significant disruptions or a triggering event, such as financial difficulties or operational failures.

In relation to supervision and enforcement, the Pensions Regulator will have enhanced powers to monitor and intervene in master trust schemes. That includes the ability to impose penalties for non-compliance and to direct trustees to take specific actions if members' rights are at risk. The regulations also provide for fraud compensation fund adjustments — that is, adjustments to the fraud compensation fund criteria — which will now mean that only the insolvency of the scheme funder is required for a master trust to apply. That simplifies the process and provides greater protection for members.

In conclusion, the regulations are amongst a number of important steps that we have heard about today. These ones aim to safeguard the interests of master trust pension scheme members across the North. They provide a robust framework for authorisation, supervision and intervention to ensure that those pension schemes remain secure, well-managed and resilient. The Committee was content for me to recommend the Occupational Pension Schemes (Master Trusts) Regulations (NI) 2024 for approval by the House.

Thank you for that further response from the Committee. I call the Minister to conclude the debate on the motion by making a winding-up speech.

I am grateful to the Deputy Chair and the Committee for their support. I commend the motion to the House.

Question put and agreed to. Resolved:

That the Occupational Pension Schemes (Master Trusts) Regulations (Northern Ireland) 2024 be approved.

The Minister and the Deputy Chair of the Committee are getting through the business very efficiently, and lots of business at that. I ask Members to take their ease for a moment while we change the top Table.

(Mr Deputy Speaker [Dr Aiken] in the Chair)