The Pensions Regulator has published updated guidance on the tender process for fiduciary management services and trustees, setting objectives for investment consultants as it prepares to take over regulation of these duties this autumn.

Since December 2019, trustees have been legally required to run a competitive tender process when appointing fiduciary managers for a fifth or more of scheme assets, and have had to set strategic objectives for their investment consultancy provider.

From this October, TPR will take over compliance-reporting and policing responsibilities for these requirements from the Competition and Markets Authority, after the Occupational Pension Schemes (Governance and Registration) (Amendment) Regulations 2022 made last month by the Department for Work and Pensions. The regulations were published for consultation in 2019 but the process was delayed due to the coronavirus pandemic.

‘The new regulations don’t change the goalposts’
These duties were first introduced by the CMA’s Investment Consultancy and Fiduciary Management Market Investigation Order 2019 following its probe into the sector, which found that trustees who tendered for fiduciary management services were more likely to pay less and receive better quality service. It also discovered that trustees faced difficulties monitoring the quality of investment consultancy services due to limited available information.

TPR’s executive director of regulatory policy David Fairs said the introduction of these regulations should not place an additional burden on schemes given that for two years they have had to comply with their obligations and self-certify their compliance to the CMA.

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