The Pensions Regulator (TPR) said it has “signed off” on a draft consultation which will deliver trustee guidance on how they should run a competitive tender for fiduciary managers.

Speaking at the Pensions Management Institute’s Trustee Workbench yesterday, 6 June, TPR executive director, David Fairs, said the consultation will be out over the next few weeks and will “go further” than just guidance on fiduciary management.

The guidance will help trustees with the Competition and Market Authority’s (CMA) proposed remedies in the fiduciary management and investment consultant market, requiring pension schemes to run a competitive tender before choosing a fiduciary manager for more than 20 per cent of its assets.

Asked when trustees can expect guidance from the regulator, Fairs said: “I have signed off on it so it’s not that far away. I think probably over the next few weeks we will see a draft consultation. What I would say is that the guidance will go further than just looking at fiduciary management, it will look at how schemes set objectives and how trustees should measure performance against those objectives.

Previously, TPR said will consult for six to eight weeks at the end of June, on how trustees should run a tender, however, Fairs said that the guidance will go further.

“It is intended to be a much more helpful document for trustees where in some cases you see trustees not setting clear objectives of their investment managers and then not being very clear on how evaluate them,” he added.

“We are hoping to provide something that will be much more helpful as a tool, particularly for trustees of smaller pension schemes that might not have access to advice that some of the larger schemes have.”

It hopes to have the guidance in place by the end of 2019.

First proposed in December 2018, the CMA’s remedies will also require trustees to to set strategic objectives for the scheme, after the watchdog found that “below average” quality firms had higher market shares that “above average” quality firms.

In February, the CMA published its draft order on its remedies and has statutory deadline of 11 June to implement the remedies.

The Department for Work and Pensions (DWP) said it will move to have legislation in place by the end of the year. The regulator will then be responsible for overseeing the trustees.

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