Monday 10 June 2019: Today, the Pensions Authority publishes its response to the consultation on obligations for trustees of defined contribution (DC) master trusts.
In July 2018, the Pensions Authority published a consultation paper on the regulation of DC master trusts. The paper set out the Authority’s view of obligations appropriate for DC master trusts, after the transposition of the IORP II Directive, to reflect the particular risks that apply in comparison to traditional single employer schemes. The obligations included requirements for the trustee, a continuity plan, capitalisation, conflicts of interest, charges transparency and communications.
The Authority received 22 submissions from a mix of stakeholders including trustees, pensions industry, representative organisations and individuals. While there was agreement with many aspects of the consultation paper, there were strong concerns expressed regarding the capitalisation requirement, the requirement for a majority of independent directors of the trustee company and the prohibition on tying the scheme to a particular service provider.
Having considered the consultation responses, the Authority has revised some aspects of its proposed obligations for DC master trusts and the attached document reflects these changes.
The drafting of regulations is at an advanced stage and the Department of Employment Affairs and Social Protection is working towards transposing the Directive as early as possible. In the mean-time, the Authority considers it appropriate to set out its view of obligations appropriate to DC master trusts, over and above those that will apply to single employer schemes under IORP II, so that existing master trusts and those considering establishing one are made aware of the requirements.
These requirements are set out in the attached document and it is intended that they will be incorporated in codes of practice in due course. Once transposition occurs DC master trusts will be a supervisory priority for the Authority.
Master trusts operating on a DB structure have unique features that are being considered separately and further guidance will be published in relation to those schemes at a later date.
The report is available under Related Files below.
For further information, contact:
The Pensions Authority
Tel: 01 613 1900
Note to Editors
The Pensions Authority
The Pensions Authority (the “Authority”) is the statutory body established by the Pensions Act 1990 (the “Act”) to regulate occupational pension schemes, trust based RACs and Personal Retirement Savings Accounts (PRSAs) and to advise the Minister for Employment Affairs and Social Protection on overall pension policy development. See www.pensionsauthority.ie