News for trust-based schemes
Since December 2019, trustees have been required to:
Currently, investment consultancy services must comply with the Investment Consultancy and Fiduciary Management Market Investigation Order 2019 (the CMA order) and compliance is monitored by the Competition and Markets Authority (CMA). However, from 1 October 2022, regulations come into force which are designed to integrate into pensions law relevant aspects of the CMA order and which will enable TPR to take over the role of monitoring and enforcing compliance with these requirements.
The new regulations will largely replicate the CMA order, with the main change being that trustees will instead be subject to TPR compliance and monitoring processes. They include provisions to ensure that where trustees have taken action to comply with the Order, they will not be expected to duplicate that action when the regulations take effect.
Ahead of the new regulations coming into force, TPR published updated guidance in August 2022 reflecting this change and summarising the minor policy differences between the existing requirements and the new regulations.
Trustees are required to review the performance of each investment consultancy provider against its objectives at least every 12 months. Where appropriate, the objectives must be reviewed at least every three years and without delay after any significant change in investment policy.
David Fairs, TPR’s Executive Director of Regulatory Policy, said: “Robust monitoring of a scheme’s financial advisers can influence the effectiveness of its investment outcomes and ensure it is following long-term plans. It also helps trustees ensure they are delivering value for money for savers. Since trustees have been required to comply with these obligations and to self-certify their compliance to the CMA for two years, the introduction of these regulations should not place an additional burden on schemes.”
If you have any questions on the updated guidance, please speak to your usual PS Aspire contact.