The Occupational Pension Schemes (Governance and Registration) (Amendment) Regulations 2022

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend the Occupational Pension Schemes (Scheme Administration) Regulations 1996 (S.I. 1996/1715) (“the 1996 Regulations”) and the Register of Occupational and Personal Pension Schemes Regulations 2005 (S.I. 2005/597) (“the 2005 Regulations”). These amendments are made to transpose, into pensions legislation, Parts 3 and 7, and related provisions of Parts 9 to 11, of the Investment Consultancy and Fiduciary Management Market Investigation Order 2019 made by the Competition and Markets Authority on 10th June 2019.

Part 2 of these Regulations inserts a new Part 6 into the 1996 Regulations. The new Part 6 of the 1996 Regulations:

(a) sets out the duties of the trustees of occupational pension schemes which are relevant trust schemes in connection with the provision of fiduciary management services and investment consultancy services (Chapters 2 and 3 of Part 6 of the 1996 Regulations), and

(b) makes provision for enforcement of those duties by the Pensions Regulator (Chapter 4 of Part 6 of the 1996 Regulations).

For these purposes “relevant trust scheme” has the meaning given in new regulation 30 of the 1996 Regulations, “investment consultancy services” has the meaning given in new regulation 34 of the 1996 Regulations, and “fiduciary management services” has the meaning given in paragraph 3 of the new Schedule to the 1996 Regulations. Such services do not include high-level commentary provided by an actuary or certain advice given to the trustees of a relevant trust scheme by the scheme’s legal adviser acting in that capacity.

The trustees of relevant trust schemes will be required to set objectives for persons who provide them with investment consultancy services, and review the performance of those providers against those objectives annually (new regulations 35 and 36 of 1996 Regulations).

The trustees of relevant trust schemes will also be required to carry out a qualifying tender process in respect of arrangements they have made, or make in future, for a person to provide them with fiduciary management services or for such a person to manage an additional amount of the scheme’s assets which such a person manages.

Part 3 of these Regulations amends regulation 3 of the 2005 Regulations so that information concerning persons who provide fiduciary management services or investment consultancy services to the trustees of a relevant trust scheme is “registrable information”. “Registrable information” is information which must be entered in the register of occupational and personal pension schemes compiled and maintained under section 59 of the Pensions Act 2004 (c. 35).

Part 3 of the Regulations also makes minor amendments to regulation 3 of the 2005 Regulations to remove from the registrable information requirements certain information which is no longer needed by the Pensions Regulator.

Part 4 of these Regulations imposes a duty on the Secretary of State to review the operation of the provisions of the new Part 6 of the 1996 Regulations.

A full impact assessment of the effect that these Regulations will have on the costs of business, the voluntary sector and the public sector has been undertaken. A copy is annexed to the Explanatory Memorandum which is available alongside these Regulations on www.legislation.gov.uk. Copies have been placed in the libraries of both Houses of Parliament and may also be obtained from the Better Regulation Unit of the Department for Work and Pensions, Caxton House, Tothill Street, London, SW1H 9NA.