The ICAEW has published a draft assurance framework for the defined contribution (DC) 'master trusts' which pension providers are creating in order to manage the pension investments of many individual companies within a single entity, following the introduction of auto enrolment.

The framework has been produced in partnership with The Pensions Regulator and is intended to help trustees demonstrate to potential and existing customers that their scheme is being run to a high standard.

Henry Irving, head of ICAEW's audit and assurance faculty, said: 'Everybody, whether an employee or employer, wants to be confident that their pensions money is managed properly. Having an independent expert produce an assurance report can help employers assess the master trusts and effectively demonstrate that they operate to a good standard.'

The consultation outlines a set of 'control objectives', based on many of the regulator's DC principles and quality features. The objectives, that cover standards of practice trustees are expected to meet to deliver good member outcomes, should be underpinned by robust control procedures to help these objectives be met.

The independent assurance framework focuses on six key areas. These include the scheme's essential characteristics; the existence of a comprehensive governance framework; people who understand their duties and are fit and proper to carry them out; ongoing governance and monitoring; sound administration; and communication to members so they are able to make informed decisions about their retirement savings.

ICAEW says that it is expected that master trusts should obtain independent assurance annually, while other larger DC schemes may want to adopt this framework as best practice.

The consultation closes on 16 December 2013, with final guidance planned for publication in the spring of 2014.

The consultation document can be found HERE