Automatic Enrolment Retirement Savings System Act 2024 section 74

Investment rules

Section 74 sets out the investment rules that investment management providers must follow when investing the resources of an AE provider scheme, including adherence to the prudent person rule and the obligation to act in the best long-term interests of participants.

• Investment managers must follow the prudent person rule and invest scheme resources in the best long-term interests of participants, resolving any conflict of interest solely in the participants' favour.
• Investments must be properly diversified, predominantly held on regulated markets, and managed to ensure the security, quality, liquidity and profitability of the portfolio as a whole, with environmental, social and governance factors taken into account.
• Derivative instruments may only be used where they reduce investment risk or facilitate efficient portfolio management, must be prudently valued and included in scheme asset valuations, and must not create excessive exposure to any single counterparty.
• Investments in collective investment undertakings, certain insurance policies and Member State government bonds are treated as meeting the regulated market and diversification requirements, provided the underlying investments themselves comply.