Master Trust

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Master Trust

A trust into which a large number of investors deposit money. The investors then allow the trustee to invest the money on their behalf and keep the profits. A master trust is useful because the larger number of securities in the investors' combined funds can entitle them to discounts or other preferential treatment. An example of a master trust is a unit investment trust, which is an unmanaged portfolio the investor may buy.
References in classic literature ?
Some low fellows, they say, said to him--Tom, why don't you make tracks for Canada?' `Ah, master trusted me, and I couldn't,'--they told me about it.
The authorisation process has "significantly" reduced the number of master trusts operating in the market, XPS noted, with 44 master trusts having exited or triggered their exit according to the latest figures published by the Pensions Regulator.
In 2016, the Commons Work and Pensions Committee expressed concern about the development of "potentially unstable" master trusts, which provide occupational pension schemes for multiple employers who are otherwise unconnected.
The measures in the Pension Schemes Bill follow concerns that some people's savings could be at risk from master trusts. The Bill will require master trusts to meet stricter operating rules.
THE GOVERNMENT is set to introduce tougher regulation on auto-enrolment master trusts in response to industry calls to weed out incompetent or potentially fraudulent providers.
Unlike larger pension providers, master trusts are not regulated by the FCA but are instead overseen by The Pensions Regulator (TPR), which provides a lower level of supervision, meaning that if they fail, members' money is not expected to be protected.
(5) These plans commonly invest a large share of their assets in various collective investment vehicles, including common trust funds managed by banks, trust companies, or similar institutions, pooled separate accounts sponsored by insurance companies, and master trusts, which facilitate joint investment of the assets of more than one plan sponsored either by a single employer or by a group of commonly controlled employers.
Those institutions also will be allowed up to five years of additional transition time for transfers of assets to certain securitization master trusts. That additional transition time applies only if all beneficial interests issued to investors after July 23, 2001, permit the changes in structure necessary to comply with those isolation standards.
Master trusts separate back-office services for pension funds from investment services for the same funds to create unified trustee accounts for custody, settlement, receipt of interest and dividend payments, foreign exchange risk management and other administrative functions.
"Originally, AcSEC had two proposed SOPs--one covering 401(h) plans and one on investments, covering such issues as what should be disclosed for master trusts," said Marilee P.
One drawback to master trusts is that they can be difficult to establish in other countries.