TPR updates guidance on best value for savers

TPR has updated its guidance to help DC schemes comply with new regulations designed to ensure they consider all the investment opportunities available to achieve best value for savers. From 1 October 2023 trustees must state their policy on investing in illiquid assets in the statement of investment principles for their scheme’s default arrangements. Illiquid assets are those that cannot easily or quickly be sold or exchanged for cash and include any such assets held in a collective investment scheme. Chair’s Statement  Trustees will also be required to disclose the asset class breakdown for each of their scheme’s default arrangements. The new regulations have also made changes in respect of performance fees. 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. Since 6 April 2023, trustees have had the option to exclude specified performance-based fees from the list of charges falling within the regulatory charge cap limit of 0.75% per annum. Trustees must robustly assess the extent to which these fees represent good value for their savers alongside other costs and charges. Relevant Guidance updated: DC code of practice DC investment governance Communicating and reporting: DC schemes