Five month extension for defined benefit schemes to submit funding proposals to The Pensions Board.

14 April 2010: The Pensions Board is further extending by five months the deadline for defined benefit schemes to submit funding proposals and or section 50 applications for approval by the Board.

This extension allows schemes to take into account the recently implemented Occupational Pension Schemes (Preservation of Benefits) (Amendment) Regulations 2010 (S.I No. 148 of 2010). This regulation permits schemes to increase the pension scheme’s normal retirement age under section 50 of the Pensions Act with immediate and retroactive effect. 

The extension will also allow scheme trustees and employers to consider the effect of the proposed changes in the National Pensions Framework.

Revised deadline:
Any scheme whose deadline for filing a funding proposal (and/or section 50 application) expires on 30 June 2010 will be allowed to adopt 30 November 2010 as a revised deadline.  There is no change or extension to the deadline for submitting actuarial funding certificates.

Any scheme whose deadline occurs after that date and up to 31 December 2010 can add five months to their deadline – see sample table below.

Trustees who fail to submit a funding proposal under section 49(3) with or without a section 50 application by the revised deadline may be liable to prosecution and the Board reserves the right to issue a unilateral section 50 direction in such circumstances.

Making an application:

A reduction of benefits under section 50/50A is a serious loss for scheme members. Therefore, the Board will consent to an application only where it is satisfied that the proposed future operation of the scheme is robust enough to make any further application unlikely.  Before making any application, trustees must engage in a comprehensive review of the scheme.
Where you have particular questions about a possible application, you should adopt the following approach:

• Read the Section 50 and/or Section 49(3) guidelines and associated FAQs thoroughly.  In the first instance where you have any questions, ask your scheme actuarial or legal advisers.
• Before putting any questions to the Board, get the scheme actuary to prepare a draft Section 50 and/or Section 49(3) application using the relevant form on the Board’s website.  The application form is designed to make sure that all necessary information is provided, and the process of completing it may answer your questions.
• Remember that the Pensions Board will not advise on whether a Section 50 and/or Section 49(3) application should be made, or on the form, manner or level of any benefit reduction.
• Where you still have questions, please send them by email to info@pensionsboard.ie, clearly marked as ‘Section 50 and/or Section 49(3)’. The Board will consider whether further FAQs should be published.  Where necessary, the Board may contact you to discuss the issues further