As noted in our bulletin earlier this month, changes to regulations which affect employer-related investments and employer-related loans took effect from 23 September 2010.
These changes are particularly significant for schemes which invest in collective investment schemes (CISs). In essence, the legislation "looks through" collective investment schemes, so that the underlying CIS investments will now count towards the 5% maximum threshold for employer-related investments.
Action required: Trustees may wish to ask their investment managers to review their scheme investments in order to check whether changes (especially in relation to CISs) will result in their scheme breaching the 5% employer-related investment threshold. A monitoring system should also be put in place in order to ensure continued compliance with that threshold.