Ian Cormican comments on fiduciary management changes in Pensions & Investments.
Partner, Ian Cormican, discusses the new rules, coming in to effect in December, which will require trustees carry out competitive tendering before appointing a fiduciary manager to invest 20% or more of the plan’s assets.
“If a plan did not use a competitive tendering process to appoint that [fiduciary] manager, it will need to retender the mandate within five years of the manager having been appointed… And if the five years since the initial appointment have already expired, or will expire within two years of June 10, 2019, then the tender has to be run by June 9, 2021.”
Fiduciary managers are also facing a number of regulatory changes relating to strategy, including striking a balance between investment risk and company support. “This means schemes with a financially weak sponsor will be expected to shy away from risky assets as there will not be the necessary support if this strategy goes wrong”.
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