In the Pension Authority’s recently published annual report and accounts, Chairman Mr David Begg, emphasised the importance of supplementary pensions savings schemes, in addition to the State pension.
In the Report, Mr Begg highlighted two key changes that implementation of the IORP II Directive will bring when it finally becomes part of Irish Law.
The Authority’s supervisory functions will change significantly. In particular, IORP II requires that the Authority implement a forward looking and risk based assessment supervisory model. The Chairman also noted that this additional supervisory role will increase costs and will require the Authority to hire additional staff.
Data reporting requirements
Both the European Insurance and Occupational Authority and the European Central Bank have introduced data reporting requirements which came into effect in 2019. Mr Begg highlighted that the Authority’s costs will increase in order to comply with these data reporting requirements.
The Authority will make a fee recommendation to the Minister for Employment and Social Affairs as a result of the increased supervision and associated costs outlined above.
Pensions Regulator’s statement
The Pensions Regulator, Mr Brendan Kennedy, noted that the Authority plans to launch a programme of intense engagement to assist both pension scheme members and trustees understand the requirements of the IORP II Directive.
The Authority also welcomed the creation of the Interdepartmental Pensions Reform and Taxation Group, which it has begun working with on request and welcomed the improved financial situation of the defined benefit scheme.
In 2018, four cases were concluded, this represented a decrease from 2017 where 18 cases were concluded. One included a €900 fine and conviction against an employer for the deduction of pension contributions from employees’ wages and failing to remit them to the pension scheme trustees within the statutory timeframe.
The Authority carried out 12 on-site inspections which was exactly the same amount carried out in 2017. In 2018, four of the inspections were carried out on Registered Administrators, three PRSA providers and three service providers.
16 engagement meetings took place between the Authority and defined benefit and defined contribution schemes. The goal of these meetings was to ensure that trustees were carrying out their obligations and for the Authority to introduce improved governance standards into trusteeship.
The Authority carried out 179 desk based audits which was a significant reduction from the 296 audits that were conducted in 2017. The key areas of focus concerned the payment of benefits, compliance with pension scheme disclosure requirements, employee pension access and remittance of pension or PRSA contributions. In 2018, the Authority also audited 108 relevant organisations who participate in the Single Public Sector Scheme.
The Authority received and approved six funding proposals.
Freedom of Information requests
In 2018, the Authority received and responded to six FOI requests this was down one from seven requests in 2017. In both years the requests and responses were all completed on time.
The key takeaways from the Report are:
- Costs – IORP II will lead to an increase in Authority fees. The increase in fees will have to be absorbed by employers.
- Better Run Schemes – The reduction in prosecutions and audits would appear to indicate that schemes are being run to a better standard and that engagement meetings are leading to more positive outcomes.
For expert advice on your organisation’s pensions queries, 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.