Internet Explorer 11 (IE11) is not supported. For the best experience please open using Chrome, Firefox, Safari or MS Edge

2023 - A Crucial Year for IORP II Compliance

The Pensions Authority (the Authority) has recently published a number of information notes on compliance deadlines and provided guidance on when temporary derogations or exemptions from IORP II compliance will apply.

What is IORP II?

The new EU Directive on the activities and supervision of institutions for occupational retirement provision (the IORP II Directive) was adopted in 2016.

You can view the text of the IORP II Directive here.

The Annual Compliance Statement

The Authority has confirmed that an Annual Compliance Statement (ACS) for 2022 must be prepared by scheme trustees no later than 31 January 2023 in accordance with the requirements of the Pensions Act 1990 (Act). As was the case for the 2021 ACS, trustees will not be required to submit the completed 2022 ACS to the Authority in 2023. The ACS must be certified for accuracy and completeness by at least two members of the scheme’s trustee board or in the case of a corporate trustee by at least two directors.

The Authority aims to carry out sample checks and audits during the year to ensure trustee compliance with this obligation.

Group Scheme Deadline

All group pension schemes were required by the Authority to meet the full IORP II requirements by the 1 January 2023 compliance deadline.

However, where a ‘formal commitment’ was made before 1 January 2023 to wind-up the scheme and transfer its assets to a master trust or PRSAs the trustees will not be required to meet the IORP II requirements provided the scheme is wound up by 31 December 2023.

The ‘formal commitment’ to wind-up a scheme includes:

  • A written instruction from the scheme employer to the trustees to wind-up the scheme, or
  • A notification from the trustees to the scheme members notifying them of the trustees’ intention to wind-up the scheme.

The Authority aims to monitor compliance with this requirement from the start of this year. Trustees should ensure that the Authority’s Pensions Data Register is updated to show that the decision has been taken to wind-up the scheme as soon as possible.

Group pension schemes with less than 100 active and deferred members will not be expected to prepare a full trustee annual report and audited accounts where:

  • A formal commitment to wind-up the scheme has been made and the scheme is wound up no later than 31 December 2023, and
  • A final alternative annual report is prepared, or a notification made to the Authority in accordance with the Occupational Pension Schemes (Disclosure of Information) Regulations, 2006.

Deadline for One-Member Arrangements

For One-Member Arrangements (OMAs) a similar derogation is permitted. Where the trustees of an OMA, established on or after 22 April 2021, have made a formal commitment to wind up and transfer the scheme’s assets to a master trust or PRSA, they will not be expected to prepare an annual report or audited accounts. The conditions are that:

  • A formal commitment has been made by the trustees before 31 December 2022 to wind up, and
  • The OMA is wound up no later than 30 June 2023.

Once more the formal commitment requirement is satisfied where there is a written instruction from the employer to the trustees to wind-up the OMA or a where a notification is provided from the trustees to the members.

Trustee Board Composition

In its Engagement and Audit Findings Report for 2022 (Report) the Authority confirmed that many of the trustee boards audited placed too much reliance on one individual who was considered to have the necessary knowledge or experience to meet the IORP II requirements. This is likely to be an area that the Authority will focus on again in 2023, with an expectation that all trustees on the relevant board play an active part in ensuring that the board has the necessary knowledge and experience to meet the new governance standards. The Authority noted that this should include consideration of the appointment of a professional trustee as independent chair.

Key Function Holders

The appointment of scheme Key Function Holders (KFHs) is another area that is likely to be scrutinised by the Authority in 2023. Trustees should have already appointed KFHs for their scheme as the deadline set by the Authority is 1 January 2023. The Authority noted in its Report that the appointments of KFHs was slow with many trustees only compiling shortlists in December 2022. Trustees must notify the Authority of the KFH selected no later than four weeks after the appointment is formalised.

Investment Reviews

The Authority also confirmed that it has not seen enough evidence of trustee investment reviews which would include the evaluations of funds, fund managers and scheme investment advisors. This would also include an analysis of the suitability of defined contribution scheme default investment strategies. The Authority expects trustee boards to review investment information provided by fund managers and investment advisors as well as considering value for money.


While many trustees of larger schemes will have taken advice and begun IORP II compliance work well in advance of any deadline, many smaller schemes may be struggling to catch up. It is clear that the Authority intends to remain very active during 2023 in enforcing the IORP II governance requirements. Employers and trustees should not waste any time in understanding how the new regulatory environment will impact their pension scheme. Legal advice should be sought where there is any doubt.

For more information on the evolving compliance landscape in Ireland and how it may affect your organisation, contact a member of our Pensions team.

The content of this article is provided for information purposes only and does not constitute legal or other advice.

Share this: