The Pensions Authority’s guidance for Irish pension schemes on the IORP II Directive will not be available until after the directive is transposed into domestic law, The Pensions Regulator, Brendan Kennedy, has revealed.
Speaking at the Irish Association of Pension Funds’ (IAPF) Governance Conference, Monday 23 November, Kennedy said it is not possible for the authority to publish this guidance now.
“We will look closely at publishing drafts as soon as possible, our guidance will be subject to a consultation process and we will publish a draft as soon as we can, but, given that one of the objectives of our guidance is to add additional detail to what will be in the directive, obviously that in itself is a function of what the directive specifically says,” he explained.
“So far, we believe we are going to have to wait until the directive is finalised, or near finalised, but we’re conscious of the need and appetite for it, and we will publish it as soon as we can, but I don’t think we’re going to be able to publish anything this side of the transposition.”
In response to the difficulties Irish pension schemes are having in preparing for IORP II due to a lack of guidance, Kennedy said he was glad to hear of schemes that have taken action to try and address their IORP II obligation, as many have not.
“The finer details of the provisions of IORP II are not known and many of those finer provisions will actually be set out in supplementary guidance issued by The Pensions Authority in due course,” he stated.
However, Kennedy said that despite there currently being no published guidance, there are many aspects of IORP II that, even though you don’t know the finer details, you know the direction of travel.
Kennedy focused on the subject of trusteeship culture, which he said would be central to the authority’s oversight once the directive has been transposed. The authority also sees it as being fundamental to achieving good member outcomes
On culture, he said it was a set of attitudes, values, expectations and practices that determine the activity of trustees. He said if trustees’ performance falls short of what it should be then there is “almost certainly an issue with the culture of that trustee board”.
“For most trustees there has to be a fundamental change to the understanding of their role… in other words a change to their culture.”
“Up to now the role of The Pensions Authority has been to check whether specific tasks have been performed, whereas in the future our role will be to examine the approach trustees are taking to their responsibilities.”
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