On 1 October 2022, The Pensions Regulator (TPR) took over responsibility from the Competition and Markets Authority (CMA) for monitoring compliance with the legal requirements for trustees to:
- run a competitive tender process when appointing fiduciary managers in relation to 20% or more of scheme assets; and
- set strategic objectives for their investment consultancy provider.
Trustees previously had to submit annual compliance statements to the CMA by 7 January each year. However, the CMA is no longer collecting this information and no such report was required this month.
The Occupational Pension Schemes (Governance and Registration) (Amendment) Regulations 2022, which handed compliance monitoring responsibilities to TPR, also amended the Register of Occupational and Personal Pension Schemes Regulations 2005 to classify the compliance monitoring information as “registrable information” under section 60 Pensions Act 2004. Failure to take all reasonable steps to provide TPR with all registrable information in respect of a scheme may result in the imposition of a civil fine.
TPR regularly collects and updates “registrable information” by virtue of the scheme return although trustees are under an ongoing duty to notify TPR of any changes in registrable information. Pensions Expert has reported that despite the new regulations coming into force last October, trustees will not have to provide this compliance monitoring information in the 2023 scheme return cycle and that “information regarding TPR’s plans for collecting this information will be shared in due course”.
TPR’s Tender for fiduciary management services guidance and its Set objectives for your investment consultant guidance both state that, as a matter of good practice, trustees should document their compliance with the legal requirements, to include a record of details of the tender process followed, key decisions made and the reasons why. Pensions Expert says that TPR plans to publish further guidance on how trustees will be required to report compliance in future. In the meantime, trustees should continue to document and retain the information previously provided to the CMA.
As schemes have already had to record this data and provide it to the CMA for compliance with the CMA order up until September 30 2022, schemes should continue to do so and be ready to provide data to TPR when data collection is announced.