Group Life Master Trust

Since the Pensions Acts 2004 it has been illegal for pension schemes to provide life assurance benefits to members who have no actual or potential pension interest in a scheme (so called life only members). The penalty for providing coverage for life only members is a fine of upto £5,000 a trustee (or £50,000 for a corporate trustee).

The traditional remedy to this problem has been for an employer to set up and run a ‘life only’ trust. These, however, have to be established as registered pension schemes and so are not straightforward to operate.

The Group Life Master Trust is an alternative remedy to the problem.

We have established the Master Trust and act as its trustee. We will take all operation responsibility for the Master Trust. The only obligation on an employer is that they sign a deed of adherence to become a participating employer. This is a simple legal document that we will provide. This means that it is very simple for the employer.

Each employer will have their own dedicated segment of the Master Trust. The segment can be branded by the employer. This means that their employees will continue to see the life assurance as a benefit provided by their employer.

The employer will continue to use their existing insurance policy and insurance advisors. The operation of the insurance policy will remain the responsibility of the employer.