Pensions Board Publishes Report on Trusteeship
Thursday 15 February 2007: The Pensions Board has today published its Report on Trusteeship. The Report involves a detailed review of the trust model of pension scheme governance and examines the role of trustees in occupational pension schemes.
The challenges facing pension scheme trustees have increased in recent years, with legislative change, funding difficulties, new requirements under the EU Pensions Directive, and changes in accounting standards affecting the trustee role and pension scheme governance. In this context, the Minister for Social Affairs, Seamus Brennan T.D. asked the Pensions Board to examine the role of trustees in occupational pension schemes.
Having considered all of the issues involved the Report concludes that the current trust model should be retained as it continues to offer protections to pension schemes that justify its retention . The Report’s recommendations aim to enhance the governance of occupational pension schemes, and member protection.
Key recommendations made in the Report include:
• Pension scheme administrators should be registered and supervised.
• Service level agreements between trustees and administrators should be made compulsory. Guidance on the appropriate content of service level agreements should be introduced.
• Employers should automatically arrange trustee training for all trustees within six months of their appointment and at least every two years thereafter.
• The potential of new means of trustee training such as ‘e-learning’ should be explored.
• The trustee annual report should state what training has been received by trustees during the year.
• Trustee trainers should be encouraged to hold regional courses.
• The Pensions Board should have the power to appoint a trustee or authorise an administrator to carry out wind-up procedures, where appropriate.
• Each scheme should have a copy of the Pensions Board’s trustee handbook, and a ‘trustee checklist’ should be appended to the next edition of the handbook.
Discussing the Report, Brendan Kennedy, Chief Executive of the Pensions Board said: “Trustees and scheme administrators look after about €80bn of retirement savings on behalf of pension scheme members. This report makes important recommendations, designed to enhance administration standards. The main recommendation concerns the regulation and supervision of pension scheme administrators and associated disciplinary powers for the Board.”
The Report outlines the main recommended actions, allocates responsibility for their implementation, and suggests an appropriate time line for their introduction, where appropriate.
The full text of the Report is available under Related Files below.
ENDS
For further information:
Mary Hutch
Head of Information & Training
The Pensions Board Tel (01) 613 1900
Jackie Gallagher
Q4 Public Relations Tel (01) 475 1444 / 087-2371838
Notes
Origin of Trusteeship Report
A review of trusteeship was part of the Pension Board’s programme of policy work for 2001-2005. In light of the Minister’s request in February 2005, for the Board to bring forward by one year the 2006 statutory review of coverage and related matters, and the Board’s response thereto, the trusteeship project was deferred until the coverage review was completed.
This report represents a review of trusteeship as requested by the Minister and its main objectives were to:
• Evaluate the trust model of pension scheme governance;
• Identify potential regulatory and governance improvements that can be made to enable the trust model to perform more effectively, and;
• Examine the supports in place for trustees.
A guiding principle surrounding the Review was that any outcomes emanating from this report should be designed to facilitate competent performance of trustees’ duties, and increased governance standards, while minimising any additional compliance burdens on trustees, schemes and employers.
About the Pensions Board
The Pensions Board is the statutory body set up to regulate occupational pension schemes and PRSAs and to advise the Minister for Social and Family Affairs, and through him, the Government, on overall pension policy development. See www.pensionsboard.ie.