I beg to move

That the Occupational Pension Schemes (Governance and Registration) (Amendment) Regulations (Northern Ireland) 2024 be approved.

The Business Committee has agreed that there should be no time limit on this debate.

This rule is the replacement for the original regulations, which came into operation on 1 October 2022. The rule integrates into pensions law provisions of the Investment Consultancy and Fiduciary Management Market Investigation Order 2019, which was made by the Competition and Markets Authority (CMA). It also enables the Pensions Regulator to oversee compliance by trustees of relevant pension schemes to allow for effective monitoring and enforcement.

In broad terms, investment consultancy is the provision of advice to trustees on investment strategy and related matters. Fiduciary management involves the delegation by trustees of some investment decisions to advisers. The CMA made a number of recommendations, including a recommendation for legislation to enable the Pensions Regulator to oversee the duties on trustees to allow for effective enforcement.

The rule brings into law various duties placed on trustees in defined benefit and defined contribution occupational pension schemes. The regulations primarily amend the Occupational Pension Schemes (Scheme Administration) Regulations (Northern Ireland) 1997 to impose duties on trustees of relevant trust schemes in connection with the provision of fiduciary management schemes by fiduciary management providers. Trustees of occupational pension schemes are required to set objectives for persons who provide them with investment consultancy services, review those objectives at intervals of no more than three years and review annually the performance of providers against the objectives. Setting objectives enables trustees to monitor the performance of their advisers and get better value for money in the long term.

Trustees are also required to carry out a qualifying tender process when continuing to use existing fiduciary management providers, or when appointing new ones, if the scheme meets the asset management threshold. The threshold is met when fiduciary managers, who are covered by the regulations, manage 20% or more of the in-scope assets. The regulations also set out what the qualifying tender process is and when it must be carried out.

Those duties encourage trustees to become more engaged with the way in which services are bought, monitored and evaluated or to consider more efficient consolidation options. In turn, that leads to better outcomes for scheme members and employer sponsors of schemes. Specific enforcement powers are given to the Pensions Regulator in connection with those duties. For example, a process is set out whereby the regulator may issue a compliance notice or third-party compliance notice if:

"it is of the opinion that the person is not complying, or has not complied, with" the relevant provision. The regulations also amend regulation 3 of the Register of Occupational and Personal Pension Schemes Regulations (Northern Ireland) 2005 so as to require certain information about investment consultancy providers and fiduciary management providers to be included in the scheme's return, among other things. Trustees are required to provide the relevant detail about each of their fiduciary management providers and about whether the trustees carried out a qualifying tender process. If they did not carry out such a process for that provider, the trustees have to state why it was not carried out. Trustees are also required to confirm relevant details of each of their investment consultancy providers and of whether the trustees have set and reviewed the objectives and reviewed the performance of the provider. If they have not done that, they are required to confirm why.

The overall aim of the remedies is to encourage trustees to engage better and to monitor the value for money of the services that they use. Better oversight of the measures should also have a positive impact on defined-contribution members' pots and defined benefit funding shortfalls.

I support the introduction of the Occupational Pension Schemes (Governance and Registration) (Amendment) Regulations (NI) 2024. The Committee considered the statutory rule at its meeting on 11 April and understands that the regulations' primary objective is to integrate provisions from the Investment Consultancy and Fiduciary Management Market Investigation Order 2019, which was made by the Competition and Markets Authority, into our pensions law. That integration will allow the Pensions Regulator to oversee compliance by trustees, thereby ensuring the effective monitoring and enforcement of governance standards. That is to be welcomed.

The Committee understands that there are a number of key aspects to the regulations. The first is governance enhancements. Trustees of relevant pension schemes are required to conduct qualifying tender processes when appointing fiduciary management services or continuing to use fiduciary management services, especially when asset management thresholds are met, in order to ensure that trustees engage in competitive practices, thereby securing better value and service quality for scheme members. Secondly, trustees have a duty to set and review objectives of their investment consultancy providers, with reviews taking place at intervals of no more than three years. Annual performance reviews of investment consultancy providers are also required, promoting continuous oversight and accountability.

Another key aspect is enforcement and compliance. The Pensions Regulator is granted specific enforcement powers, including the power to issue compliance and penalty notices. Trustees are required to provide detailed information about their fiduciary management and investment consultancy providers in their scheme returns, fostering greater transparency.

I will move on to administrative improvements. The regulations introduce streamlined registration processes, ensuring efficient administration and accurate record-keeping. Enhanced reporting requirements should ensure that members receive regular, comprehensive updates on the performance and governance of their pension schemes.

On the matter of consultation and equality impact, the regulations will align our pensions regulations with those already established in GB, thus ensuring parity and consistency. By fostering competition and transparency in fiduciary management and investment consultancy services, the regulations protect the interests of pension scheme members and ensure that they receive the best possible outcomes.

In conclusion, the Committee acknowledges that the Occupational Pension Schemes (Governance and Registration) (Amendment) Regulations (NI) 2024 represent a positive step forward in the governance and oversight of our pension schemes, recognising the critical role that they will play in safeguarding the future of occupational pensions here. Therefore, I am content to recommend that the Assembly approve the regulations.

Thank you. I now call on the Minister for Communities to conclude and make a winding-up speech on the debate on the motion.

Thank you, Mr Deputy Speaker. I am grateful to the Deputy Chairperson of the Committee, and to the Committee, for their support. I commend the motion to the House.

Question put and agreed to. Resolved:

That the Occupational Pension Schemes (Governance and Registration) (Amendment) Regulations (Northern Ireland) 2024 be approved.