18 July 2016: Today, the Pensions Authority issued a consultation document which sets out a package of proposals to reform and simplify supplementary private pension provision in Ireland. The document is available under 'Related Files(s)'. Submissions are invited from all stakeholders and interested parties on the Authority’s proposals by 3 October 2016.
The Minister for Social Protection, Leo Varadkar, T.D. welcomed the reform proposals and related consultation at a meeting of the Pensions Authority today stating: “The current situation where a majority of our citizens will rely solely on the State pension in retirement is unsustainable and we have a duty to ensure that a better system is now put in place. As a result I regard the development and introduction of a new, universal, workplace retirement saving system for those workers without supplementary pensions as an essential objective of mine as Minister for Social Protection.
In order to successfully deliver a universal supplementary pension system, there is a need to reform and simplify the pension landscape. This is essential if we are to achieve increased coherence and consistency in the pension system and to increase the confidence and understanding of pension savers. This confidence and trust has been seriously damaged and its repair is essential if any reforms are to be successful.”
The proposals set out the Authority’s views of what is needed to reform the provision of supplementary private pensions in Ireland in order to improve outcomes for pension savers and to increase public confidence and understanding.
The Authority is proposing a revised regulatory framework that encompasses the following:
- higher standards for trustees of occupational schemes
- an authorisation process for new occupational pension schemes
- closer supervision of pension scheme management
- better information for members and more transparent charges
- rationalisation of the number of pension savings vehicles.
The proposals, if implemented, are intended to achieve significant improvements in how supplementary pensions are managed and overseen. The Authority’s final proposals, which will take account of responses to this consultation, will be submitted to the Minister for Social Protection. Any consequential proposals for amendments to primary legislation will require the approval of the Minister for Social Protection and the Government.
Commenting on the proposals for pension reform, the Chairperson of the Pensions Authority, David Begg, said: “The preparation of these proposals relates to serious concern about the efficiency of Irish defined contribution (DC) provision. They are in response to a request from the Minister for Social Protection to the Authority in 2015 to bring forward reform proposals to make pensions easier to understand and to remove duplications and anomalies in the current system.”
Begg added: “It is the Authority’s view that changes to the current system are needed in order to address the existing shortcomings so that pension savers better understand their pensions and the decisions they need to make, and achieve better value for money. The objective of such changes is to create a pension system that is fit for purpose and is underpinned by good governance principles.”
The Pensions Regulator, Brendan Kennedy, said: “There is an emphasis on DC pension provision in these proposals as it is expected that most new pension provision will be of this type. However, the reform proposals are intended to apply equally to defined benefit (DB) provision to ensure that those charged with running DB schemes do so in a manner which provides greater security for their members.”
In conclusion, Kennedy said “If the Government decides to adopt the Authority’s recommendations, considerable work will be needed to translate the proposals into specific legislative provisions. Therefore, it is likely that there will be further consultation on specific aspects of implementation in the future.”
Submissions are invited from all stakeholders and interested parties on the Authority’s proposals as set out in this document. Specific questions have been included to which we would welcome responses. However if you prefer to include more general comments, they would also be welcome.
How to respond
A submission document in word format is available on the Authority’s website under 'Related File(s)' where you can insert your responses to the consultation directly or you may send your submissions on a separate sheet.
Please email responses by 3 October 2016 to firstname.lastname@example.org or by post to:
The Policy Unit The Pensions Authority Verschoyle House 28-30 Lower Mount Street Dublin 2
A public forum to discuss the issues raised in the consultation will be held during the consultation period and details will be published on our website through the email alert system.
For further information, contact:
David Malone Head of Operations and Communications The Pensions Authority
Tel: (01) 613 1900 Mobile: 087 6857743
Note to Editors:
The Pensions Authority is the statutory body established by the Pensions Act, 1990 to regulate occupational pension schemes, trust based RACs and Personal Retirement Savings Accounts (PRSAs) www.pensionsauthority.ie