29 September 2022: Today, the Pensions Authority publishes information in relation to exit charges, trustee annual reports and audited accounts for OMAs migrating into a master trust.
As per paragraph 147(c) of the Authority’s Code of Practice for trustees, members or prospective members must be able to transfer assets in and out of a master trust without charge. Therefore, no exit charges can be applied in respect of assets held under the master trust, including an insurance policy held by the trustees within the master trust. This position remains unchanged.
However, the following will apply for existing OMAs migrating into a master trust:
• Exit charges can be applied to the ring-fenced assets transferred from the existing OMA to the master trust so that any pre-existing exit charge period can be carried forward for those ring-fenced assets.
• Exit charges can be applied where, at the date of transfer to the master trust, contributions are being made to the OMA that are subject to an exit charge on the accumulated value of those relevant contributions if the member leaves within the exit charge period (e.g., 3 or 5 year term).
• No exit charges are permitted on any future contributions to the master trust except in the above example where there is an obligation to the current level of contributions for a specified exit charge period.
• No exit charges are permitted on any increase in contributions (including automatic increases in regular contributions, discretionary increases in regular contributions or top up contributions).
• No new exit charge period may be imposed for any contribution once the OMA assets have been transferred to the master trust.
Trustee annual report and audited accounts
Where the trustees of an OMA, established on or after 22 April 2021, have made a formal commitment to wind up the OMA and transfer the assets of the OMA to a master trust or PRSA, the Authority will not expect the trustees to prepare an annual report and audited accounts provided that:
• a formal commitment has been made by the trustees before 31 December 2022 to wind up the OMA, and
• the OMA is wound up no later than six months after the formal commitment has been made.
A formal commitment would include a written instruction from the employer to the trustees to wind up the OMA or a notification from the trustees to the member notifying them of their intention to wind up the OMA.
The Authority will issue further information in relation to group schemes migrating into a master trust or PRSA in the coming weeks.
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For further information, contact:
The Pensions Authority
Tel: (01) 613 1900