U.K. defined contribution plans will be required to state illiquid investment policies for default funds in their statements of investment principles starting Oct. 1, according to latest guidance from The Pensions Regulator.
Trustees will also be required to disclose the asset class breakdown for each of the default arrangements in the statement.
The guidance is set to help trustees comply with new regulations, which require that investments provide the best value for plan participants.
Since April trustees have had the option to exclude performance-based fees from the charge cap of 0.75% of funds under management and administration. The charge cap is the annual amount that is charged to savers automatically enrolled into default funds of defined contribution plans.
The changes are aimed at ensuring transparency, as plans must disclose any performance-based fees calculated as a percentage of the average value of the assets held in the default funds.
Trustees must assess the extent to which these fees represent good value for their savers alongside other costs and fees.
“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,” Louise Davey, interim director of regulatory policy, analysis and advice, said in a news release Thursday.
