The 2022 regulations governing occupational pension schemes were recently amended. As amended, they introduce some new definitions, monetary thresholds for transferring benefits and methods of notification. We review and provide a summary of the most notable changes introduced.
The Irish Government recently approved the Occupational Pensions Schemes (Preservation of Benefits) (Amendment) Regulations 2023. The 2023 Regulations introduced some minor changes to the Pensions Act 1990 (Act) and the existing regulatory regime governing these pension schemes. The most notable changes are outlined below.
Scope of the Act
The Act gives trustees of occupational pensions schemes the power, in certain circumstances, to effect the transfer of payment for a member without the consent of the member where the transferrable amount is below the prescribed threshold. Under the 2023 Regulations, this threshold has been increased from €10,000 to €20,000.
The Occupational Pension Schemes (Preservation of Benefits) Regulations 2022 (the 2022 Regulations) required trustees to notify members, in advance of any transfer of payment, by way of a prepaid registered letter. However, the 2023 Regulations have been amended to enable for notifications to also be made by electronic means.
Various definitions have either been updated or amended under the 2023 Regulations, e.g., affiliated employer, authorised trade union, confinement,. Most notable is the amendment of Regulation 6(b)(iii) of the 2022 Regulations regarding ‘reckonable service’. The 2023 Regulations now reflects changes to maternity protection legislation in the context of paid maternity leave, which must be treated as reckonable service.
Lastly, the list of schemes which are exempt from the preservation of benefits provisions, namely Part III of the Act, have been revised to include the Single Public Service Pension Scheme and a number of other schemes which are mostly public sector schemes.
The provisions on preservation and transfer of benefits are some of the most complex in the Act. Trustees and employers should be aware of their obligations so that they are in a position to provide accurate and timely options to their members.
Where there is any doubt about these complex provisions, it is our recommendation legal advice should be sought.
For more information and expert advice on the amendments brought about in the 2023 Regulations, 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.