Virus will knock pension-age restoration off agenda, legal expert predicts
“Pension trustees and employers can’t act like an ostrich and bury their heads in the sand where they see potential or current issues,” MH&C pensions partner Stephen Gillick said in a webinar this morning (31 March).
He said that Ireland was entering a highly volatile period, but that the previous recession should have taught us to avoid changing the whole investment portfolio.
The Pensions Authority has also cautioned against ‘kneejerk’ investment decisions on funds, but has told employers to remember their legal obligations.
The body says trustees should not make immediate investment decisions, unless absolutely necessary.
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The Pensions Authority expectation is that trustees and employers will make reasonable efforts, and be proactive.
This is not definitely business as usual, Jerry Moriarty of the Irish Association of Pension Funds told the webinar. He also agreed that the pensions roadmap for a 2022 auto-enrolment of all workers was looking optimistic at this point.
“You are talking 2033 or 2034 before it’s fully implemented,” he said, pointing out that it would require ten years of contributions to lead into the new system.
“Most companies are well down on their typical workforce, but most people would agree that the priority is paying pensions, making sure the contributions get paid, get allocated and get invested,” he said.
Second-order issues
The regulatory requirements are second-order issues in the current circumstances, he said.
Jerry Moriarty pointed out that trustees would be dealing with employers who are trying to keep their businesses alive.
Trustees might be approached with changes to funding proposals, and needed to be fully aware of the impact of this and the strength of the employer to continue to fund the pension.
Moriarty said that liability measurements and bond yields had been “bouncing around”.
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Warning: Keep your GDPR house in order during crisis
COVID-19 data-protection issues could become a ‘GDPR epidemic’ for which trustees and employees will be paying for years to come.
MH&C pensions partner Stephen Gillick has warned that data protection issues and GDPR are paramount when everyone is working remotely and using digital formats that have not been designed for pension trustee communications.
Mr Gillick was speaking at a webinar titled ‘Pensions and COVID-19’ on Tuesday 31 March.
“I’ve heard of pension trustees in the last week ‘WhatApping’ sensitive member documentation to the trustees’ group,” Gillick told the webinar.
“I can’t over-emphasise this. It’s very important to look at the data you are sharing and look at the medium you are using to share that data. Is it safe? Is it secure?
“Is it actually designed for the communication of pension status, because a lot of it will be sensitive?” he queried.
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Jerry Moriarty said: “It’s probably very unlikely that any set of pension scheme rules, unless they are very recent, will actually specifically allow for meetings by Zoom or other technology.”
However, unless it is specifically prohibited, there is no reason Zoom meetings can’t go ahead, he proposed.
Gillick said that trustees should be cognisant of how their meetings were managed from a legal point of view.
Document production
Paper documentation for benefit statements might not be logistically possible at the moment because of access to data or physical printing processes.
No one is going to argue with online issuance, he feels, and trustees should take a common-sense approach, since authorities may give leeway on the prescriptive time period for document production.
In terms of what employers can do on contributions as they grapple with the effects of the pandemic and try to secure cash, with workers laid off or furloughed, the key issue, he said, was the pension-governing documentation and employment contracts.
Also, to remain Revenue-approved, all occupational pension schemes needed a “meaningful contribution”, he pointed out.
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