• Not Enough Time: Pension Fund Trustees have just 6 weeks to comply with legislation that they have yet to see
• IAPF Annual Governance Conference: Call for exemption of smaller schemes
• Positive Auto-enrolment plans at odds with disappointing approach to European Pensions Directive

With just six weeks to go before a new European Pensions Directive needs to be transposed into Irish law, the IAPF has criticised the Government for their inaction up to this point which means there is now “insufficient time” to meet the deadline. These were the concerns voiced by the pensions representative body at the IAPF Annual Governance Conference today at the Printworks, Dublin Castle, sponsored by Schroders and APT Workplace Pensions. The Conference was attended by 200 delegates. Attendees at the event heard how the Government’s disappointing approach to meeting this deadline is at odds with the stance it’s taking in other areas of pensions reform – such as the ambitious auto-enrolment plans it has for 2022.

The new legislation will increase the governance requirements on pension trustees in large and small schemes throughout the country. While the IAPF praised the Government for its progress on auto-enrolment, it took the opportunity to express its serious concern at the failure of the Government to publish draft legislation implementing the provisions of the EU’s Institutions for Occupational Retirement Provision (IORP II) Directive. The representative body contends that the failure to publish the draft legislation in advance of the January deadline, will make consultation and feedback impossible, and will place huge pressure on schemes to comply with their obligations by the deadline set by the EU.

Speaking ahead of the event Peter Fahy, Chairperson of the IAPF, said,

“The Government is way behind schedule when it comes to the (IORP II) Directive. They have left it extremely late to act and have not granted pension trustees and employers any opportunity to consult on how the Directive, which provides for proportionate implementation, should be implemented in Ireland.  Assuming the Government meets the implementation deadline at this late stage, it will still not allow trustees any realistic opportunity of complying with the new requirements by the January 13th deadline.”

IORP II will introduce new governance and disclosure requirements for occupational pension plans within the EU. Some trustees will be required to have specific qualifications and experience, give greater consideration to risk management and report on how they take environmental, social and governance factors into account. It is likely that the additional governance requirements will ultimately lead to the consolidation of smaller schemes into larger arrangements such as master trusts and this has been a stated objective of the regulator, the Pensions Authority.

Calling for an exemption

The IAPF also called for the exemption for schemes of less than 100 members from some of the provisions of the Directive until such time as there are alternative structures such as Master Trusts or auto-enrolment in place for those schemes.

“We have serious concerns that adding additional onerous regulatory requirements to smaller schemes at this time would merely result in employers discontinuing those schemes with no alternative being put in place until the new Master Trusts are available or until auto-enrolment has been introduced. This is clearly not in the interests of the members of those schemes.”

Other highlights from the new Directive include:

-          The requirements relating to the content and format of Pension Benefit Statements to be issued annually to members have will have to include projections on a number of different bases.

-          These will also have to be issued to people who have left the employer but still have benefits in the scheme.

-          Statements may be issued in electronic format and be presented in a way that is easy to read. The statement should include a best estimate and an unfavourable scenario.

-          The whole governance structures of pension schemes will change with trustee boards having to have qualified and experienced trustees.

-          Schemes will have to have key function holders including internal audit functions

Attendees at today’s event heard from the following speakers:

-          Diversity, Better Balance and 30% Club - Aongus Hegarty, Dell, Better Balance for Better Business Initiative

-          Sustainability: Integrating Investment Risks of the Future - Belinda Gan, Schroders

-          GDPR & Data Protection for Pension Schemes - Garrett O’Neill, Data Protection Commission

-          Master Trusts - Coming Full Circle - Vincent Boyle, APT Workplace Pensions

-          IORP II – the future for trustees - Brian Buggy, Matheson

-          Carillion, regulation and survival - Robin Ellison, Pinsent Mason

About the IAPF Established in 1973, the Irish Association of Pension Funds (IAPF) is a non-profit, non-commercial organisation representing pension savers whose aim is to ensure we have a secure, fair and simple system of pension provision in Ireland.