Our Pensions and Health & Prosecutions teams review the provisions that pension schemes trustees need to be aware of in the context of the Assisted Decision-Making legislation.

The Assisted Decision-Making (Capacity) Act 2015 has been commenced since April 2023. The much-welcomed Act applies to persons who require assistance to make important decisions. Recognising that all adults have a right to play an active role in decisions that affect them, the Act provides a framework for implementing the necessary supports to do so.

We highlight the aspects of the Act that are essential for pension trustees to familiarise themselves with insofar as they owe a fiduciary duty to act in the best interests of their beneficiaries.

Assessment of capacity

The key starting point for pension trustees is to understand how the Act determines capacity.

The Act initially assumes that every adult has the capacity to make their own decisions. Section 3 provides that “capacity is assessed on the basis of the person’s ability to understand, at the time that a decision is to be made, the nature and the consequences of the decision to be made by him or her in the context of the available choices at the time”. All practicable steps must be taken to help the person making the decision to understand the decision.

A person would be deemed to lack capacity if:

• They cannot understand the information relevant to the decision
• They cannot retain the information long enough to make a decision
• They cannot weigh up the information in making a decision
• They cannot communicate their decision by any means

A functional capacity analysis is carried out at the time of any decision. Guiding principles are set out in Section 8 of the Act, which pension trustees and administrators should familiarise themselves with to ensure that their functional capacity assessment is fulfilled in line with the legislation.

Three tiers of decision-making

Pension trustees must familiarise themselves with the three-tiered system of decision-making assistance available. Where decision supports are in place, understanding each tier will assist pension trustees in ensuring that the relevant decisions are made with the appropriate level of input by the parties involved.

The tiers are:

• Decision-Making Assistance: a decision-making assistant is appointed, but the person retains the ultimate decision-making responsibility
• Co-Decision-Maker: a person appoints somebody to make decisions on their behalf on a joint responsibility basis
• Decision-Making Representative: the Circuit Court can intervene to appoint a representative to make certain decisions on behalf of a person who is unable to make those decisions for themselves

Wards of Court

Under the Act, within three years of commencement, existing wards of court will be transitioned to the new tiered system. Any wards deemed to have capacity will be discharged from the wardship jurisdiction, while others who are declared to lack capacity can avail of one of the three tiers for support.

Pension trustees should establish their beneficiaries who are wards of court and once the transition has taken place should determine what tier, if any, they fall under to appropriately discharge their fiduciary duties to those individuals.

Enduring Powers of Attorney

While the Act has not invalidated existing Enduring Powers of Attorney or 'EPAs' created under the Powers of Attorney Act 1996, EPAs can now only be created under the new Act. The creation of EPAs must be done in line with the new statutory procedures provided for, including a requirement to register with the Decision Support Service (DSS), which now has oversight over all EPAs in Ireland. Trustees and their administrators should maintain a record of their beneficiaries who have made EPAs and when those EPAs were made. It would also be beneficial for trustees who are aware of EPAs created prior to 26 April 2023 to check from time to time whether they have since been registered by an attorney on grounds of incapacity.

DSS registers

The DSS is the statutory agency responsible for oversight and implementation of the assisted decision-making system. The DSS maintains registers of Co-Decision-Making Agreements, Decision-Making Representation Orders and EPAs. Inspection of the registers is permitted where a legitimate interest can be established, and scheme administrators and trustees may wish to implement a system of checking the registers on the Decision Support Service to ensure all information about the capacity of the beneficiaries has been gathered.

Conclusion

By virtue of the fiduciary duties placed on pension trustees, they must act in the best interests of their beneficiaries. The Act provides a new and improved framework for doing so. By engaging with the provisions of the Act, pension trustees can satisfy themselves that they are fulfilling their duties. Going forward, trustees may wish to review any processes they have to ensure a system is in place for compliance with the Act.

Pension trustees should seek legal advice to understand fully how the Act impacts them. For more information, please contact a member of our Pensions or Health & Prosecutions teams.

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