Thursday 28 January 2016: Yesterday, at a Pensions Authority seminar the Pensions Regulator, Brendan Kennedy set out the objectives of the Authority for the next five years and plans for 2016.
The seminar was attended by over 300 people representing trustees, registered administrators, providers and advisors from the pensions sector.
The Pensions Regulator said: “There are good pension schemes, whose members understand their pension situation and are supported to make the decisions they need to. But there are other schemes, and it is these schemes which are our concern. Members in less well run schemes will be less comfortable, are less likely to save, less likely to make reasonable decisions and less likely to have as good an outcome.
What we must have is a pension system where pension schemes are always well run. We need a pensions system that is much more capable of providing consistently good value. The pension system should help people understand their position and clearly explain and guide and support them though the decisions they are asked to make. We also need people to be happy that the pension system is well regulated.”
Kennedy further stated: “The Pensions Authority does not and should not run pension schemes. However, it is our responsibility to see that pension schemes are properly run.”
Specific Pensions Authority plans for 2016 include:
• a varied programme of proactive compliance activity. This will include on-site inspections of administrators, reviews of PRSA compliance, especially in the area of actuarial reporting, desk compliance audits, and checking of employer pension access provision. A particular focus of our work will be the timeliness and accuracy of annual scheme information data submissions
• resolution of the small number of defined benefit schemes whose funding position have not been resolved. This may include issuing orders for wind-up where appropriate
• a significant increase in our programme of engagement with trustees of defined benefit schemes – this comprises detailed discussions with them of how they undertake the management of their scheme and their governance responsibilities
• further guidance for all trustees, including the DC codes which we are launching here this morning, further model documents, and guidance for DB trustees on actuarial advice
• an updating of our website to improve navigation and make it more user-friendly
• development of pension reform proposals for submission to the Department of Social Protection.
In concluding his remarks at the seminar, the Pensions Regulator said: “We – trustees, the pension industry and the Pensions Authority – must work so that everyone saving for their retirement is comfortable with their pension – they must be familiar with it, understand it and be supported properly in the decisions they have to make. It is your responsibility to make sure that their best interests are at the centre of all you do. It is our responsibility to oversee and support you. There is a great deal of work for all of us to do.”
Pensions reform and simplification
The seminar also included an update from Mary Hutch, Head of Policy at the Pensions Authority on the work of the Authority on pensions reform and simplification.
The supplementary pension system in Ireland has become extremely complex and difficult to understand without investment of considerable time and effort or the engagement of professional advisors. The Authority and the Revenue believe that simplifying aspects of the private supplementary pension system from the top down would make pensions more understandable to scheme members, potential members and the general public and facilitate broader pension-related benefits.
Furthermore, a reduced number of vehicles with similar tax and benefit structures would allow better understanding for the Government of the cost of tax relief for pensions and the impact of any planned changes in that regard. Any proposals, if adopted, would involve changes to tax law, to Revenue practice and to the Pensions Act.
Mary Hutch said: “The objective of the simplification process would be to reduce the number of pensions vehicles and to simplify and make more consistent the tax treatment of pension contributions and benefits on a revenue neutral basis. A simplified system would also be easier to understand for employers, employees, members and prospective members and would greatly reduce, and possibly remove entirely, opportunities for regulatory arbitrage.”
Hutch added: “A very important part of any programme of simplification of the current pension system would be to ensure that any changes will accommodate whatever type of universal pension scheme may be considered by Government.”
The Pensions Regulator’s presentation and the slides from the Authority’s Pensions Seminar are available on this page under Related Documents.
For further information, contact:
Head of Operations and Communications
The Pensions Authority
Tel: (01) 613 1900
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