UK/Ireland cross-border update

The Occupational Pension Schemes (United Kingdom Members) Regulations 2020 (S.I. No. 717/2020) (the Regulations) came into effect on 31 December 2020. Following the end of the transition period for the UK withdrawal from the European Union (EU), UK social and labour law provisions no longer apply to UK members of Irish occupational pension schemes.

The purpose of the Regulations is to amend the Pensions Act, 1990 (the Pensions Act), to ensure that commencing 1 January 2021, the relevant provisions of the Pensions Act apply to Irish occupational pension schemes with UK members, for the benefit of the UK members. Effectively, the Regulations extend Irish social and labour law provisions to the UK members of Irish schemes. In brief, these are Part III of the Pensions Act (Preservation of Benefits), Part V (Disclosure), Section 59B (Reductions in Benefits) and Section 59C (Increases to Pensions in Payment).

For further information on the Regulations see:

Occupational Pension Scheme (United Kingdom Members) Regulations 2020

Separately, amendments made to the Taxes Consolidation Act, 1997 (as amended) contained in the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2020 (No. 23) have also come into effect. This means that Irish occupational pension schemes with UK members continue to have exempt approved status and remain eligible for tax relief on the basis that they have received authorisation and approval from the Pensions Authority pursuant to Part XII of the Pensions Act, to accept contributions from an EU undertaking (including the UK), in respect of EU members (including the UK) and this authorisation has not been revoked.

Therefore, under Irish revenue and pensions legislation there is no barrier to Irish schemes with UK members continuing to accept contributions in respect of those UK members. Furthermore, the amendments to the Taxes Consolidation Act, 1997 also ensures that pension contributions to UK occupational pension schemes by Irish employers continue to qualify for tax relief.

Following the end of the Brexit transition period, the Pensions Regulator in the UK developed guidance for UK cross-border pension schemes and UK employers that are contributing to occupational pension schemes established outside the UK. This guidance can be found here.