IAPF Ezine
The IAPF made particular strides in representation and research over the first half of 2007. Outlined below are a number of key developments.
Services Sector Survey
IAPF commissioned research into mandatory pensions, simplification and coverage amongst florists, butchers and hairdressers that earn greater than 30,000 and are over age 30. Almost 60% of those surveyed said they had little or no knowledge of how current tax incentives worked for pensions. The survey found that 86% of those without a pension would start one if the government introduced a simple scheme whereby it contributed 1 for every 1 saved. The report also indicated that there is a deep split in the introduction of mandatory pensions. Click here to view.
Asset Allocation Survey
Irish pension funds experienced strong growth during 2006. At the year end assets under management amounted to 87.7 billion compared with 77.9 billion at the end of 2005, an increase of 12.6%. This increase reflects the positive market environment throughout 2006. Since the end of 2002, the value of assets managed by Irish pension funds has almost doubled from 44.8 billion to 87.7 billion. Click here to view.
Solvency II
Solvency II is effectively new European legislation setting out minimum solvency requirements for insurance companies operating in the EU. It is currently in the news as regards pensions because there is a proposal that it be extended to IORPs. Solvency II sets a prescribed basis for calculating the reserves which have to be held. If Solvency II is applied to pension funds it would mean that:
- Existing pensions and leaving service benefits would have to be valued using a discount rate linked to bonds.
- An additional buffer would have to be held such that there is a 0.5% chance of the plan becoming insolvent.
Solvency II will continue to form a major part of the IAPF agenda over the next two years and IAPF will be making representations through Maurice Whyms and Jerry Moriarty at the working group of the EFRP.
Revenue Developments
Following continuing representations by the IAPF, we are pleased to advise you that a recent Revenue rule change means that many individuals can now put higher personal pension contributions into their pension and also fund for higher benefits. Those affected are members of company share schemes. The rule change will allow the value of shares to be included in the calculation of remuneration for the purpose of determining the maximum allowed personal pension contributions and the maximum benefits that can be provided on death, leaving service or retirement. Click here to view this report.
Revenue also announced at the May meeting with IAPF that the Residual Benefit Limit has increased from 15,000 to 20,000.
Approved Retirement Funds (ARFs) for DC Occupational Pension Schemes
IAPF have been continuously lobbying for ARFs to be extended to DC Occupational Pension Schemes. As you may be aware, we have issued a lobby letter to all our members asking them to write to the Minister for Finance, returning the letter to IAPF so we can collectively lobby the Minister. To date IAPF have had a great response. We plan to submit these letters in the coming weeks. There is still time to return this letter. For further information on the lobby please click here.
Funding Standard Review
IAPF have been involved in a number of meetings to address the implications of the current funding standard on the funding of pension schemes. The Pensions Board established a review group to which the IAPF contributed. IAPF sought the introduction of a scheme specific Funding Standard mechanism for schemes, along with the movement of future pension increases payable to pensioners to a lower order of priority. The Funding Standard review is ongoing and IAPF continues to make representation through Gerry Ryan on the Board.
Fines
IAPF have also written to the Pensions Board seeking clarification on the application of the new on-the-spot fines that will apply for breaching certain compliance requirements. The fines are due to be introduced from September. In a submission to the Pensions Board, the IAPF indicated that while we support good governance of pension schemes, there is concern that the fines will be operated in a heavy handed manner. Click here to view our submission.
Benefit Statements
IAPF met the Pensions Board on a number of occasions regarding benefit statements. Firstly we met the Board, with a number of the Larger Funds Group, to express concern at the disclosure regulations for Defined Benefit benefit statements. Secondly, IAPF participated in a working group on Statements of Reasonable Projections. IAPF hope to have further details of developments in relation to Benefit Statement requirements soon.
Chief Executive After 5 years with the IAPF as Chief Executive, Nora Finn left the IAPF on 13th July 2007. Nora was successful at developing relationships in government departments and kindred organisations which helped IAPF to be successful with many of our lobbying efforts. Membership services grew significantly via events, trustee training programmes, website and newsletters. Nora has been instrumental in developing the IAPF into a highly successful organisation and we wish her every success in the future. |
New Structure IAPF completed a structural review in early 2007 and decided to appoint a Director of Policy. IAPF is delighted to announce that Jerry Moriarty joined the IAPF from 2nd July 2007. Jerry previously was Head of Investigation & Compliance at the Pensions Board. As Director of Policy, he will build relationships with our members, industry regulators, relevant government departments and the media and will lead the drive towards enhanced participation in the national debate on pensions policy. This will largely be delivered through research, technical evaluation and the drafting of detailed proposals and option analysis. |
 In future, the direction and oversight necessary from an operations perspective will be provided through the IAPF Management Committee comprising the Chair - Patrick Burke, Vice Chair - Marie Collins, Treasurer - Ollie Fahey, Secretary - Niall Glynn and Director of Policy - Jerry Moriarty. IAPF are fortunate to have the continued services of our experienced and talented staff : Diane Mulrennan (Events Officer), Anne Kelly (Administrative Officer), David Fox (Projects Officer) and Lisa Downes (Web Developer). |
Dates for your Diary
September 11th 2007 IAPF Investment Seminar, National Gallery @ 5.00pm Topic Socially Responsible Investment
October 2nd 2007 Annual Conference, Dublin Castle @ 8.00am Topic Green Paper or Amber Light for Pensions