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UK roundup: Regulator to quiz trustees on cost assessments

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The UK’s smallest pension schemes may not be properly assessing their costs, according to the Pensions Regulator (TPR).

TPR yesterday launched a thematic review of how small defined contribution (DC) schemes assess their “value for members”, which is set to assess the annual chair’s statements of 100 pension funds.

“From our research and experience we believe that many small and micro schemes are failing to meet our expectations by providing a quality assessment of how their charges represent value for members,” said Anthony Raymond, acting executive director of regulatory policy at TPR. 

Raymond said the regulator was especially concerned about “sub-scale” schemes resulting in “two classes of DC saver – those that benefit from the premium of scale and good governance and administration, and those that do not”.

Graham Vidler, director of external affairs at the Pensions and Lifetime Savings Association (PLSA), said: “Assessing value is a critical part of trustees’ duty to the scheme and TPR is right to act on any concerns they may have.”

The PLSA has recently called for a “renewed regulatory focus” on trustee standards. The Financial Conduct Authority also highlighted the limited ability of trustees to challenge providers in its Asset Management Market Study earlier this year.

TPR is set to report on its findings in the summer of 2018.

RPMI Railpen backs music rights fund

RPMI Railpen – the £25bn (€28.4bn) pension scheme for the UK’s railway sector – was announced yesterday as the lead investor in a music royalties fund run by Kobalt Capital.

The company raised $345m (€298.3m) for the portfolio, and has added leverage to give a final capacity of $600m.

It is the second music royalties fund Kobalt has launched, the first having invested more than $350m since 2011.

Kobalt provides musicians with a technology platform that allows them to track where their music is used around the world and reclaim royalties. Artists connected to Kobalt include Queens Of The Stone Age, Lady Gaga and LCD Soundsystem, according to the company’s website.

Musicians can sell copyright to Kobalt’s funds, transferring royalties to investors.

Craig Heron, deputy investment director at RPMI Railpen, said: “This opportunity provides us with just the type of long-term returns that we need to help us meet our mission statement to pay members’ pensions securely, affordably and sustainably.”

Broadstone Group in double acquisition

UK employee benefits and pensions consultant Broadstone Group has bought Manchester-based Mitchell Consulting, an actuarial firm, and its sister company 2020 Trustees, an independent trustee group.

Grant Stobart, chief executive of Broadstone, said 2020 Trustees would “remain independently managed” following the acquisition. The firm is one of five providers on the Pension Protection Fund’s panel of independent trustees, which help steer schemes through the lifeboat fund’s assessment process.

In a statement announcing the acquisitions, Broadstone said Nigel Jones, CEO of Mitchell Consulting, would lead the combined actuarial consulting arm.

Jones said: “The acquisition is good news for clients, who will benefit from an expanded network, access to a larger pool of consultants providing expert guidance and solutions, and access to new tools, platforms and support services that will help meet their needs.”

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