The pensions landscape has changed. Has your fiduciary manager evolved too?

It has already been a big year for defined benefit pension schemes, with further change still to come. The DWP’s draft regulations on surplus flexibilities, published on 10 June 2026, are a significant development, with consultation having closed on 2 September and implementation expected from April 2027. For many schemes, full funding is no longer the finish line - the real question is what comes next. For schemes using fiduciary management, that also raises a broader question: if your fiduciary manager was appointed for a different stage of the journey, are they still the right fit today?

Fiduciary management is a type of investment strategy, where investment decisions can be delegated to an expert. Over time, for many schemes the nuances in the decisions being delegated have changed. Often, it’s no longer about maximising returns with ‘exciting’ assets; it’s about locking down and monitoring risks with relatively ‘boring’ assets. In these instances, the investment strategies that fiduciary managers now employ are fundamentally different, with outcomes dependent on the quality of implementation and risk management.

As schemes de-risk, these ‘boring’ assets start to account for most of the risk. The differences in how fiduciary managers manage liability hedging and credit portfolios can be vast and can have a material impact on outcomes. Yet these risks are too often overlooked as the differences across providers in these areas is perceived to be insignificant.

Some schemes in the past will have included risk settlement credentials as an explicit factor in their evaluation criteria - this doesn’t necessarily translate into how well that fiduciary manager could help support you for a run-on strategy. There are outfits in my wardrobe that I wore 5 or even, embarrassingly, 10 years ago. Whilst they still might fit, it doesn’t mean that they are choices that I’d make today or outfits comfortable now for the school run. Times have changed and so have my fashion decisions.

In our poll of 124 trustees and employers (representing £108bn of assets), 40% expected to run-on and not to try and buy-out at the earliest opportunity. That is a significant number of schemes that need to be catered for - and all with different and changing requirements.

A scheme’s improved funding position and evolving long-term objectives may change what it needs from both its investment portfolio and its fiduciary manager.

We are seeing a wide gap in how fiduciary managers have evolved to meet today’s needs. Not all are equally well equipped to build the more ‘boring’ but crucial portfolios needed for the years ahead. The strongest providers have developed clear surplus release frameworks, have robust downside planning and have enhanced monitoring capabilities. Others are lagging, particularly in downside analysis, which we see as critical.

For schemes that wish to continue using a fiduciary manager, overseeing that arrangement properly should remain an important strategic priority. Trustees need to test whether what they are paying for, and what they are receiving, still aligns with what the scheme needs today. The best approach may or may not be with their current provider (and may or may not even be with fiduciary management). While some investment decisions can be delegated, what cannot be is the trustee’s responsibility to deliver the best outcomes for members, making this an important time to pause and reassess.

As with those old outfits, the real question is not whether it still fits - but whether it still suits you. Fiduciary management should be judged the same way. An arrangement that worked well for an earlier stage of the journey may no longer be the right choice for the scheme you are running today.