29th August 2019 Anna Copestake comments in Professional Pensions on CMA tender rules

The requirement for schemes to conduct a competitive tender process only extends to schemes that have delegated the investment decision-making to fiduciary managers.

Anna Copestake commented that the question was about who makes the decisions on investments, rather than where the assets are placed.

“A fiduciary manager could decide to invest a scheme’s assets in a number of pooled funds, each receiving less than 20% of scheme assets, but it’s the total assets the manager has control over that counts.”

Schemes will need to focus on the proportion of assets managed by a fiduciary manager, and keep an eye on market movements to recognise if, where asset values “bob about”, they breach the threshold.

“So schemes that are on the border of the threshold will need to take care and may decide to run a process anyway.”

Anna further added that the threshold only applies on a scheme-wide basis, meaning that where one part of a sectionalised scheme opts for fiduciary services, they may not necessarily be required to conduct a tender.

Read Anna’s comments in Professional Pensions here

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