The next IORP II deadline is fast approaching with a date of 31 January 2022. Relevant pension schemes are subject to many onerous and complex regulatory and governance requirements under the new IORP II compliance regime. Trustees of all relevant pension schemes must have prepared and signed their first Annual Compliance Statement (ACS) by 31 January 2022. One member arrangements established before 22 April 2021 are not required to submit an ACS until 2027. The ACS requirement does not apply to death benefit only or pay as you go schemes. The ACS must be prepared by no later than 31 January each year in respect of the preceding year. The ACS must be certified for accuracy and completeness by at least two trustees or, in the case of a corporate trustee, by at least two directors.
This imminent ACS deadline is in respect of 2021 (2021 ACS). Its format is set out in a form published by the Pension's Authority (PA) in November 2021 and is available on the PA website. This form requests information on:
- Organisational structures of the scheme
- Trustee consideration of ESG factors when making investment decisions
- Administration and accounting procedures
- Reporting arrangements
- Remuneration, risk management and internal audit policies
- Trustee Board make up, and
- Risk management and internal audit key function holders.
It is likely that future ACS content will change over the coming years. The 2021 ACS does not have to be submitted to the PA, but the PA may request sight of it as part of its supervisory activities. However, subsequent ACSs will have to be submitted to the PA. The 2022 ACS must be submitted by the end of February 2023. Trustees will be given more detail on how to make that submission during 2022.
There are many more IORP II compliance deadlines on the horizon. Employers and trustees therefore need to work together to put an effective plan in place to ensure their scheme is fully compliant in time.
We will issue further updates as future deadlines approach. In the meantime, trustees and employers need to focus on all matters necessary to achieve full compliance by 1 January 2023 including the following:
- Gap analysis
- Planning necessary work and putting a compliance calendar in place
- Making any necessary appointments
- Putting necessary policies, procedures, and arrangements in place, and
- Reviewing, updating, and drafting compliant contracts/legal documents as necessary.
Right now, your immediate focus will be on the 31 January 2022 deadline and preparation and signing of your 2021 ACS. Many employers and trustees will already be working on this, however, if you have any queries or are unsure of what you need to do to ensure compliance, please 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.