20 April 2015: Today, the Pensions Authority published its Annual Review of 2014, giving an overview of activities for 2014 and a forward look for 2015.
Regulatory activity and 2014 statistics at a glance:
- at 31 December 2014 there were 733,027 members in 62,195 schemes – the number of active members of occupational pension schemes reduced by 3,936 during 2014.
- there was an increase of 21,944 in defined contribution (DC) scheme membership and a decrease in defined benefit (DB) scheme membership of 27,334.
- the number of PRSA contracts increased by 10,713 to 226,605.
- 30 prosecution cases were concluded. The Authority secured convictions in 19 cases. Defendants received the benefit of the Probation Act in five other cases and a further six cases were struck out due to payment of arrears.
- 75 new investigations were opened into various alleged breaches of the Pensions Act. The alleged breaches varied from deduction and non-remittance of pension contributions to failure to reply to a statutory request for information.
- the Authority carried out 13 onsite inspections of Registered Administrators (RAs).
- 55 meetings were held with trustees, pension providers and public service administrators to discuss a range of compliance issues.
- 285 schemes were audited for compliance with a particular legislative requirement such as disclosure requirements including provision of leaving service options among other things.
- 14 schemes and their respective trustees underwent a comprehensive review by the Authority of the stewardship and administration of their schemes.
- 60% of defined benefit schemes (not in wind-up) were in compliance with the funding standard as at 31 December 2014. All bar 30 of the remainder have agreed funding proposals designed to bring the scheme into compliance with the standard.
- 36 funding proposals were received from defined benefit schemes and the Authority specified a later date in respect of 32 of these proposals. One application was withdrawn and as at year end the remaining three applications were being considered by the Authority.
- 25 applications to reduce accrued benefits were received. Of these, 21 were approved, one application was withdrawn and as at year end the remaining three applications were being considered by the Authority.
- 10,000 enquiries were received and dealt with.
Commenting on the review the Pensions Regulator, Brendan Kennedy said:
“2014 was another very busy year for the Authority and we intend 2015 to be equally productive, with our day-to-day supervision of pension scheme compliance and oversight of the fulfilment by administrators, trustees and providers of their reporting obligations.”
The Regulator confirmed that the Authority’s direct engagement with defined benefit (DB) schemes will continue and in the coming months: “It is a source of considerable concern where schemes have not yet addressed a funding deficit. The Authority is fully prepared to use its powers under the Pensions Act to direct trustees to reduce benefits or wind-up schemes, where necessary.”
The Regulator continued by highlighting the Authority’s recently released annual DB statistics: “Despite some improvements, our data indicates that while some schemes have considerably reduced their investment risk, the overall situation is one where many trustees are relying on equities to outperform bonds in order to meet their liabilities. This strategy entails considerable risk, which will fall especially on the younger members of the schemes. High risk is not an appropriate approach to take where the benefits cannot otherwise be afforded. The aggregate data, taken with the individual scheme figures, draws us to the conclusion that the position of DB schemes remains a fragile one. This is a matter the Authority intends to raise directly with pension scheme trustees as part of a programme of increased direct contact.”
The Chairwoman of the Pensions Authority, Jane Williams, commenting on the challenges in underpinning the objective of adequate and predictable pensions, said: “To address the challenges, in the assessment of the Authority, where changes are needed to the current practice of regulation, proposals will be developed for consideration by the Department and the Minister, and new actions implemented. The objective of our proposals will be to make pension schemes more member-centred by introducing higher standards for scheme trustees, greater oversight of how schemes are run and overall a simpler pensions landscape, ultimately significantly reducing the number of DC schemes.”
In addition the Chairwoman confirmed: “The Authority has begun work with the Universal Retirement Savings Working Group which was set-up by the Tánaiste, Joan Burton, T.D., to develop a roadmap and timeline for the introduction of a new supplementary workplace retirement saving scheme. The Authority will also continue to work with the Department of Social Protection and Revenue to identify simplifications that can be introduced to pension rules to make them easier to understand and to remove duplications and anomalies.”
The Chairwoman went on to say: “The Authority welcomes the announcement of the Pensions Council and its members, and its particular emphasis on representing consumer input into pension policy. With the Pensions Regulator appointed as a member of the Pensions Council the Authority looks forward to playing its role in the work of the Council.”
The Annual Review 2014 and 2015 forward look report, is available on www.pensionsauthority.ie
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