Timeframe

First implemented in 2012, the UK’s auto enrolment was fully in effect by 2018.

Consolidation

Originally, the UK market boasted over 80 Master Trusts. Regulatory pressures and a need for economies of scale led to a consolidation, with there now being approximately 30 Master Trusts, with continued consolidation happening at pace.

Regulatory tightening

The UK has seen significant additional focus on schemes in this area, from its dual regulators The Pensions Regulator (‘TPR’) and the Financial Conduct Authority (‘FCA’). The regulatory initiatives have been focused on creating a market in which schemes are well-governed, cost-effective and provide good outcomes to members. This has driven out schemes that are unable to excel in these areas.

Key lesson

The UK’s experience serves as an example of the power of a disciplined market with higher established standards and strong regulatory oversight. It highlights that early market inefficiencies can take several years to organically achieve the requisite efficiencies.

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