Wednesday 18 April 2007: The Pensions Board intends to take a tougher approach to any breaches of the Pensions Act and has warned the pensions industry to ensure all its affairs are in order.
Speaking today at a review of the new Pensions Act developments, held by the Irish Association of Pension Funds (IAPF) Trustee Forum, Mr Jerry Moriarty, Pensions Board Head of Investigations and Compliance, told attendees that an on-the-spot fines regime is expected to come into force in September this year, following the enactment on 31 March of the Social Welfare Law Reform and Pensions Act, 2007. “The introduction of the fines will act as a new form of remedy for specified breaches of the Pensions Act,” Mr Moriarty warned. “The new fines will provide an alternative to going to Court and a more efficient and proportionate means of addressing many compliance issues. Under the new system, The Pensions Board will give the offender 21 days to remedy the offence and pay an appropriate fine. If there then is compliance, the prosecution will not proceed. Any fines paid cannot come from the scheme assets.”
The exact amount of the ‘on-the-spot’ fines will be prescribed in Regulations which will be made later in 2007 and is likely to be €2,000. The maximum fine on conviction in Court is €5,000. More serious matters will continue to be dealt with by immediate prosecution. Introduction of ‘on-the spot’ fines will coincide with a tougher approach by the Board to breaches of the Pensions Act.
“Breaching the Pensions Act is breaking the law and will inevitably result in fines or prosecutions. The deadlines in legislation are generous so there are no real excuses,” Mr Moriarty added.
Ms Yvonne White, Pensions Board Head of Technical Services and Research, told the IAPF seminar about the Board’s recent Review of Trusteeship which has recommended that the current Trustee pensions model should be retained but changes needed to be made. “Trustees and scheme administrators now look after almost €90 billion of retirement savings on behalf of members. This report makes important recommendations designed to enhance member protection. The current trust system continues to offer protection to pension schemes that justify its retention. However, our review has highlighted the need for change on key issues such as external regulation, trustee expertise and remuneration as well as the governance of schemes internally”, she said.
The main recommendation of the Review concerns the regulation and supervision of pension scheme administrators and associated disciplinary powers of the Board.
“To enhance the standard of scheme administration, pension scheme administrators should be registered and supervised and service level agreements between trustees and administrators should be made compulsory. Furthermore, in order to increase the standards of trustee ability, employers should automatically arrange trustee training for all trustees within 6 months of their appointment and every 2 years thereafter. New means of training - such as e-learning - should also be explored as well as consideration of new training content such as issues relating to ethics.” Ms White added.
The Board’s report on the Review of Trusteeship outlines the main recommended actions, allocates responsibility for their implementation, and suggests an appropriate timeline for their introduction. Where appropriate, preparations for the implementation of the Review’s recommendations will now get underway, with any necessary legislative changes being subject to the usual regulatory impact analysis.
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For further information please contact:
Head of Information and Training
The Pensions Board
Tel: (01) 6131900
Q4 Public Relations
Tel: (01) 4751444 / 087-2371838
About The Pensions Board:
The Pensions Board is the statutory body set up to regulate occupational pension schemes and Personal Retirement Savings Accounts (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
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.
See www.pensionsboard.ie for the Report of The Pensions Board to the Minister for Social and Family Affairs on Trusteeship.