In 2019 the Competition and Markets Authority ("CMA") issued The Investment Consultancy and Fiduciary Management Market Investigation Order 2019 ("the Order"). The Order seeks to address features of the investment consultancy and fiduciary management markets which were reducing competition in relation to the supply of these services to pension scheme trustees.
The Order applies to the majority of Occupational Pension Schemes, although there are some exceptions, including (but not limited to): unregistered schemes, public service schemes, smaller schemes, and certain master trusts.
The compliance statement
1. Where the Order applies, trustees will need to submit a compliance statement and certificate to the CMA by 6 January 2021 (unless DWP regulations are brought in before this date – unlikely, and if they are, the basic compliance will probably still apply albeit under the pensions regulatory regime).
2. The compliance statement should refer to the parts of the Order that have been complied with; and
3. The certificate must be signed by either:
a) a director of any sole corporate trustee,
b) the Chair of the Board of Trustees; or
c) if there is no Chair, any other member of the Board of Trustees.
What happens if you don’t comply?
- Any non-compliance must be reported to the CMA within 14 days (including a description of the steps taken to address the issue);
- The CMA may take enforcement action if there is a breach of the Order (this could include issuing non-compliance letters or directions).
Obligations on Pension Scheme trustees
As a reminder, the Order also introduced new obligations on trustees from 10 December 2019 to:
- Carry out a competitive tender process on entering into a new agreement with a fiduciary manager that would result in 20% or more of scheme assets being delegated (separate provisions apply if there are existing agreements in place);
- Set strategic objectives for providers of investment consultancy services to the scheme.