Pensions Bulletin 2022/22

Our viewpoint

DWP concludes on trustee oversight of investment consultants and fiduciary managers CMA remedies

Somewhat belatedly, and with the pandemic being blamed for its reprioritisation, the DWP has responded to a consultation on trustee oversight of investment consultants and fiduciary managers launched in July 2019.

The consultation, following the Competition and Markets Authority’s investigation into investment consultants and fiduciary management, set out regulations to put two of its remedies into the main body of pensions law.  The two remedies are those that apply to trustees of most occupational pension schemes.  The consultation in turn followed an Order issued by the CMA in June 2019 that has been fully operational since December 2019.

The DWP regulations are to go ahead broadly as intended (see Pensions Bulletin 2019/30) and have been laid before Parliament in draft form with the intention that they will come into force on 1 October 2022.  The Pensions Regulator, whose current trustee guidance (see Pensions Bulletin 2019/46) reflects the contents of the CMA Order, is to update its guidance by this date.

As before, the regulations require trustees to:

  • Carry out a tender process for fiduciary management services, subject to certain limited exceptions - a Schedule to the regulations spells out in great detail, for various situations, the trustees’ duties in this respect
  • Set objectives for their investment consultants and review their performance against these objectives at least every 12 months

These replace the CMA’s remedies one and seven respectively.

The regulations also enable the Pensions Regulator to oversee the requirements via submission of prescribed additional information in the scheme return.  This is backed up by a system of compliance notices (directed at the trustees or third parties), financial penalties and appeal mechanisms.

Many of the changes made by the DWP as a result of the consultation are to ensure greater consistency with the CMA Order.  The changes include clarification that the provision of high-level investment commentary provided by actuaries in actuarial valuations does not, by itself, comprise the provision of investment consultancy services.  The DWP says that it should be evident where the actuary goes beyond this and in such a case the trustees are required to set and review objectives for the provision of such investment consultancy services.

The regulations only replace part of the CMA Order, which it appears will need to be modified going forward.

The main part of the regulations is subject to a review mechanism every five years, with the first report on the results of the DWP’s review requiring to be published by 31 December 2028.


For most trustees this change from the CMA Order to DWP regulations should have little impact on what they are required to do, with the only obvious change being that the nature of the compliance reporting will alter.  However, the DWP states that there are four small policy differences between the CMA Order and the DWP regulations – as set out on page 5 of the DWP’s impact assessment published alongside the consultation response – and these may impact some trustee bodies.

Presumably, the next round of trustee reporting to the CMA due by 7 January 2023 will now be replaced by an expanded scheme return requirement.  However, an announcement to that effect has yet to be made.

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Regulator and FCA outline consumer journey next steps

The Pensions Regulator and the Financial Conduct Authority have jointly published a feedback statement for the Call for Input they issued in May 2021 on the pensions consumer journey (see Pensions Bulletin 2021/21).  The statement highlights feedback received, actions that have been taken and actions the regulators intend to take to help engage consumers so they can make informed decisions that lead to better pension saving outcomes.  The statement is also intended to share knowledge on key issues with the industry and other stakeholders to help inform initiatives that the regulators design.

As a result of the feedback, the Regulator and/or the FCA are intending to:

  • Publicise and encourage larger schemes and providers to support Midlife MOT toolkits available for employers
  • Work with MaPS to produce guidance which enables employers to support staff returning to the workforce
  • Conduct an equality review to understand how well the market works for different groups of savers
  • Review the Pensions Regulator’s communicating to members section of the DC guidance to provide more information on inclusivity, use of behavioural insights and timing of communication; and
  • Explore firms’ concerns around providing more support to customers about accessing their pensions and discuss options for giving consumers greater support within the current regulatory framework, while also considering further FCA interventions beyond the Stronger Nudge to support consumer decision-making

The regulators plan to publish an update to their joint strategy in the second half of 2022 which will outline the shared strategic outcomes that will continue to draw their focus in the years ahead.


The statement covers some of the trickier consumer conundrums, such as how employers can be helpful without giving advice and how to give members the information they need without overloading them.  There was never going to be a quick fix improvement to pension savers’ understanding and engagement, but the regulators are showing they are committed to improvement over the longer term.

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This Pensions Bulletin does not constitute advice, nor should it be taken as an authoritative statement of the law.  For further help, please contact David Everett at our London office or the partner who normally advises you.