Kempen has been appointed to two fiduciary mandates for UK pension schemes, some of the first appointments made under the country’s new mandatory tendering rules introduced last year.
The UK arm of the Dutch fiduciary specialist is now responsible for investment management of the £61.9m (€70.2m) National Centre for Social Research (NatCen) Retirement Benefits Scheme, and the £20m Pauls Malt Pension and Life Assurance Scheme.
Both schemes carried out open tender processes at the end of last year in accordance with recommendations from the UK’s Competition and Markets Authority (CMA), according to a press release from Kempen.
The CMA recommended mandatory tendering of fiduciary mandates as part of a package of measures to improve competition in the fiduciary management sector and increase engagement by trustees in the appointment of providers.
The two schemes employed independent advisers to conduct the searches: the NatCen scheme’s search was supported by IC Select, while the Pauls Malt scheme was advised by First Actuarial.
Kempen has now completed the transfer of assets to its fiduciary platform.
Nicholas Clapp, head of business development for fiduciary management at Kempen, said: “Just as the UK enters a new phase of transparency in the realm of selecting fiduciary managers, global events have underlined the importance for schemes of selecting truly impartial experts if they do not feel they have the capability themselves.
“We look forward to working with many more such pension schemes, as the ongoing effects of Covid-19 underline the dual importance of risk management and of independent, long-term thinking.”
Last week, River & Mercantile Group announced it had been appointed as fiduciary manager of a £630m mandate for the Smurfit Kappa UK Pension Fund.
Mandatory tendering has been in force since 10 December, with schemes now required to run an open bidding process if they are outsourcing more than 20% of their assets.
Not yet written into law
However, the rules have yet to be written into UK law. The government consulted on draft rules – the Occupational Pension Schemes (Governance and Registration) (Amendment) Regulations Act 2019 – last year, with a view to making them effective from 6 April 2020.
The new rules will also give the Pensions Regulator powers to enforce the tendering requirements.
The final version of the regulation has been delayed, first by the UK’s general election in December, and then by the suspension of normal parliamentary business due to the Covid-19 pandemic.
In an impact assessment of the new regulations, published by the Department for Work and Pensions last summer, the government said delaying implementation beyond 6 April 2020 would risk “potential disruption and confusion to the industry along with criticism of an already perceived complex regulatory regime”.