Pension funds that decide to invest in standalone fiduciary management funds are being reassured that they will not be subject to mandatory tendering requirements.
Where trustees make the decision to invest directly in a standalone fund, even where managed by a fiduciary manager, for example, their scheme is not included within the scope of the Competition and Markets Authority's (CMA) order.
The requirement for schemes to conduct a competitive tender process - which kicks in where mandates cover in excess of 20% of scheme assets - only extends to schemes that have delegated the investment decision-making to fiduciary managers.
The reassurance comes as both schemes and fiduciary management firms are ramping up to begin full tender processes, with hundreds of schemes expected to approach the market again over the next few years, and many in the final quarter of this year.
According to KPMG's most recent annual fiduciary management survey, around £142bn of pension scheme assets are covered by 862 mandates - although not all of these will be captured by the CMA's order.
KPMG investment advisory director Greg Wright said managers are now gearing up, questioning exactly which mandates are covered by the order, and organising planning meetings to prepare for a potential capacity crunch.
"That shows they expect the third-party evaluators to have a role to play despite that not being stipulated by the CMA," he said.
"There's something around capacity and actually whether people will be able to get three quotes [as required] if the providers are drowning in invites."
He noted that many schemes that had been considering fiduciary management had held off while the CMA conducted its investigation and prepared its final order - and these schemes may now come to market at the same time.
Yet, some providers have questioned whether the order does actually cover all clients using fiduciary management services for 20% or more of assets.
Arc Pensions Law partner Anna Copestake said 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," she said.
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."
Similarly, Copestake added, 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.
Mayer Brown pensions partner Edward Jewitt agreed, noting: "If things are structured so that the pension trustees make the decision to invest in multiple standalone funds managed by the same manager, then that should not count as fiduciary management services. The trustees have made the investment decisions, not the manager."
But this kind of structure is "not common", he said, and schemes which take advantage of this "black letter loophole" are "unlikely to be doing their members any favours".
"The CMA's aim is to get pension trustees to shop around for the best deal for their scheme, which is difficult to disagree with."
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