Member Protection Statement

The National Pension Trust (the ‘Trust’) is an occupational pension scheme defined contribution master trust and therefore does not have a financial strength rating. Its trust-based structure is intended to deliver a level of member security since the trust’s assets are kept quite separate from creditors in the event of failure of any party.


The National Pension Trust is a trust-based defined contribution scheme, registered with HMRC and The Pensions Regulator. The Trust is an authorised Master Trust in accordance with Section 5 of The Pension Schemes Act 2017.


Five Trustees (of which four are professional trustees) have been appointed to manage the trust in line with the governing trust deed and rules. The Trustees are responsible for the investment of members’ pension accounts held within the trust in accordance with any instructions from members. 


Protecting pension scheme assets
  • A trustee holds the assets of the trust for the benefit of the members and their beneficiaries in accordance with the trust’s Trust Deed and Rules.
  • A trust structure is intended to deliver a level of member security by keeping the trust’s assets separate from those of the employer.
  • It is the trustees’ duty to act in the best interests of the scheme members and other beneficiaries. This includes monitoring the suitability of all investments.
Trustees must also act within the framework of the law. Pensions law is extensive with a raft of member protection requirements. There are specific areas of legislation which impose requirements on occupational pension schemes, including trust law and specific pensions legislation (supported by Codes of Practice issued by The Pensions Regulator).
The Pensions Regulator is the UK regulator of work-based pension schemes. Its objectives include improving confidence in pensions by protecting members’ benefits and encouraging high standards in the way pension schemes are run.


Investing contributions
The Trustees invest all contributions with the Trust’s investment managers, Legal & General Assurance (Pensions Management) Limited – otherwise known as PMC. PMC is a UK long-term insurer, providing unit-linked pension policies and segregated investment management services.
PMC is wholly owned by Legal & General Investment Management (Holdings) Limited, which is itself wholly owned by Legal & General Group plc.
PMC is a separate legal entity within the Legal & General Group (the ‘Group’), with its own Board of directors responsible for acting independently to promote the success of the company and exercise independent judgement. PMC’s operational and governance arrangements are distinct from the Group’s other major businesses.
As a result of the corporate structuring and the operation of English company law, PMC’s assets are legally and financially separated from the rest of the Group and from other L&G entities.
Due to its status as a long-term insurer, PMC is authorised by the Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority (FCA) and by the PRA.  
Given the regulatory framework, the nature of the business risks and PMC’s level of capital retention, PMC insolvency is highly unlikely. Nevertheless, in an insolvency situation, PMC pooled fund policyholders are further protected by a floating charge which would crystallise over all of the rights, benefits and assets of PMC, and sums would only be paid to creditors in accordance with the priorities of the charge. 

In broad terms, the floating charge together with the law on the winding-up of long-term insurers gives all pooled fund policyholders priority over the pooled assets for the value of their units.


Financial Services Compensation Scheme
In the event of PMC insolvency, if there is any shortfall after the operation of the floating charge, PMC clients who are eligible claimants under Financial Services Compensation Scheme (FSCS) criteria may be able to make recoveries of the shortfall (if any) from the FSCS up to 100% of any eligible claim, although we believe this position has yet to be tested. It should be noted that an insolvency event of this kind that ultimately resulted in a detrimental impact on members’ pension pots would be an extreme event.


In summary

  • If a participating employer were to become insolvent, as the trust assets are held under trust they are legally separated from the assets of the employer and would not therefore be available to creditors of the insolvent employer.
  • If XPS Pensions Consulting Limited (‘XPS PCL’) (the Founder) were to become insolvent, as the Trust’s assets are held under trust, they are held outside of this company and, therefore, they would not be available to creditors of XPS PCL.
  • If the Trust terminated on the insolvency of the Founder, there is a risk that Trust assets would be required to meet the costs of administering the wind up of the Trust. One of the key features of The Pension Schemes Act 2017 is the obligation for the Trust to be able to demonstrate that they have access to sufficient financial resources to continue to operate. As part of the ongoing supervisory requirements the Trust has to provide evidence on an annual basis that sufficient financial reserves exist in the event of the failure of the Founder.
  • If XPS Administration (a trading name within XPS PCL) were to become insolvent, new administrators would be appointed by the Trustee.
  • If PMC (Investment Manager) were to become insolvent, new investment managers would be appointed. It is possible that the legal investment vehicle held by the Trustee with the Investment Manager could, in extreme situations, be impacted upon by the insolvency but the regulatory structure provides considerable protections.

The contributions made to the Trust buy units in investment funds for the benefit of trust members. The value of these units can go down or up depending on the way the investments perform and will affect the value of members’ pension accounts. Any investment losses caused by movements in unit prices are not covered by the FSCS.

The trust structure affords protection for members’ interests as the separation of services and legal ownership of trust assets, which are independently controlled by the Trustee, means that timely, proactive changes can be made to any elements of the service, such as the investment provider.