Commentary on Sections Obligations of trustees of occupational schemes Section 245: Power to make regulations governing investment by trustees
895.Subsection (2) inserts a new section 36(1) and (1A) into the Pensions Act 1995 requiring trustees, to exercise their powers of investment in accordance with regulations and section 36(3) and (4) of that Act. Where the trustees have delegated responsibility for investment to a fund manager then that fund manager has to exercise his responsibility in accordance with regulations.
896.Subsection (4) amends the existing section 36(3) so that before making investments trustees have to obtain and consider proper advice on whether the investment is satisfactory. In considering whether the investment is satisfactory the trustees must have regard to the requirements of regulations under section 36(1) to the extent that these relate to the suitability of investments and to the principles contained in any statement of investment principles required by section 35.
897.Subsection (5) amends the existing section 36(8) so that the Regulator cannot issue a prohibition order under section 3 of the Pensions Act 1995 to a trustee who doesn’t take all reasonable steps to comply with the requirements in section 36 to obtain and consider advice. The Regulator may still issue a civil penalty under section 10 of the Pensions Act 1995 (civil penalties) to such a trustee.
898.Subsection (6) inserts a new section 36(9) to allow the provisions of section 36 to be disapplied to certain schemes.