The Occupational Pension Schemes (Scheme Administration) Regulations 1996

[F1 CHAPTER 3 E+W+S Use of investment consultancy services

Textual Amendments

F1 Pt. 6 inserted (1.10.2022) by The Occupational Pension Schemes (Governance and Registration) (Amendment) Regulations 2022 (S.I. 2022/825), regs. 1(2), 2(2)

Meaning of “IC provider”, “existing IC provider” and related expressions E+W+S

34.— (1) This regulation defines “IC provider”, “existing IC provider” and related expressions for the purposes of this Part.

(2) “IC provider”, in relation to a relevant trust scheme, means a person who provides investment consultancy services to the trustees of the scheme and is not—

(a) a trustee of the scheme, or

(b) a trustee owned company.

(3) A person (“P”) provides investment consultancy services to the trustees of a relevant trust scheme if—

(a) P gives advice to the trustees of the scheme on or in connection with any of the following—

(i) the merits of—

(aa) the exercise of any of the trustees’ powers of investment in any particular case (including the making or retaining of any investment);

(bb) the appointment of a particular fund manager;

(cc) strategic asset allocation;

(dd) adopting a particular investment strategy, or

(ii) the preparation or revision of the statement of investment principles, and

(b) P gives that advice otherwise than in P’s capacity as a legal adviser appointed by the trustees.

(4) Where P is an actuary, any high-level commentary given by P in, or in relation to, an actuarial valuation on the link between the statutory funding objective and the investment strategy, is not to be treated as advice for the purposes of this regulation.

(5) “Existing IC provider”, in relation to a relevant trust scheme, means an IC provider who—

(a) was appointed by the trustees of the scheme before the commencement date, and

(b) continues to provide investment consultancy services to those trustees on and after that date in accordance with the terms of that appointment.

(6) References in this Part to investment consultancy services are to be read in accordance with this regulation.

Duty to set objectives for IC providers E+W+S

35.— (1) The trustees of a relevant trust scheme must set objectives for each IC provider.

(2) The trustees must—

(a) when setting objectives for an IC provider, have regard to the statement of investment principles, in so far as it is relevant to services provided, or to be provided, by that provider;

(b) where the IC provider is appointed on or after the commencement date, ensure that the IC provider’s objectives are set by the end of the day on which the IC provider’s appointment takes effect.

(3) The trustees must review and, if appropriate, revise an IC provider’s objectives—

(a) at least every three years, and

(b) without delay after any significant change in investment policy.

(4) Where an existing IC provider has strategic objectives which were set, before the commencement date, under Article 12 of the 2019 Order (“the existing objectives”)—

(a) the existing objectives are to be treated as if they had been set by the trustees under paragraph (1), and

(b) the trustees must complete the first review of the existing objectives for the purposes of paragraph (3)(a) before the end of the period of three years beginning with the date on which those objectives were set under Article 12 of the 2019 Order.

Duty to review performance of IC providers E+W+S

36.   The trustees of a relevant trust scheme must, at least every 12 months, review the performance of each IC provider against the objectives set under regulation 35.]