The Pensions Regulator has published new guidance on investment governance rules.

The publication has been designed to support pension scheme trustees and advisers meet new investment governance rules.

From next month, trustees will be legally required to run competitive tender processes to recruit fiduciary managers if their schemes use such arrangements for at least 20% of their funds.

This requirement will also apply to existing arrangements that have not been made as a result of competitive tender.

Trustees will also be required to set strategic objectives for those providing them with investment advice, so that they can monitor performance and measure whether the service is good value for money.

Separately, fiduciary managers and investment consultants will also have new duties placed on them around reporting charges, fees and performance to make it easier for trustees to compare providers effectively.

The TPR says that, following a consultation over the summer, the final guidance to help trustees meet these duties is now available online, along with the consultation response and the changes made as a result.
 
A statement read: “The changes follow an investigation by the Competition and Markets Authority (CMA) into the investment consultancy market which found weaknesses, including trustees entering into uncompetitive terms or failing to switch to potentially better providers, because they struggled to compare fees and performance.”
 
The new guidance can be read here: https://www.thepensionsregulator.gov.uk/en/document-library/regulatory-guidance/tender-and-set-objectives-for-investment-service-providers