Guidance issued for new rules on illiquid assets
Trustees seeking to include illiquid assets must state their investment policy in the statement of investment principles (SIP) for their scheme’s default arrangements from 1 October 2023.
Louise Davey, TPR’s interim director of regulatory policy, analysis and advice, said: “Trustees have a duty to savers to act in their best interests”. That means working hard to deliver the retirement income that savers expect, including properly considering the full range of investment options. Our updated guidance helps trustees make these often complex decisions.”
“Trustees have a duty to savers to act in their best interests”
Louise Davey
The new regulations have removed a regulatory barrier that may have discouraged trustees from exploring investment in funds that attract performance fees. Since 6 April 2023, trustees have been able to exclude specified performance-based fees from the list of charges falling within the regulatory charge cap limit of 0.75% per annum.
To ensure transparency, schemes must disclose in their chair’s statement any performance-based fees incurred in relation to each of their default arrangements, calculated as a percentage of the average value of the assets held in those defaults.
Trustees must robustly assess the extent to which these fees represent good value for their savers alongside other costs and charges.
