Position of UK/Ireland schemes under the EU IORPS Directive Notice

Notice to UK/Ireland Schemes

Friday 18 November 2005: This note should be read in conjunction with the previous note which appeared on our website on 31 August 2005 and which can be viewed below.

We have now received clarification from the EU Commission that UK/Ireland schemes do fall within the scope of the cross-border provisions of the Directive 2003/41 on the Activities and Supervision of Institutions for Occupational Retirement Provision (commonly known as the IORPs Directive). From the viewpoint of Irish regulations, UK/Ireland schemes are schemes established in Ireland which have some members in the UK. These are schemes which were approved by the Revenue Commissioners prior to 1994 under a reciprocal agreement with the UK.

Article 20 of the IORPs Directive requires schemes which engage in cross-border activities to receive a prior authorisation and to fulfil certain ongoing conditions. As UK/Ireland schemes were originally thought not to have been encompassed by the cross-border provisions of the IORPs Directive, in the interests of natural justice, some transitional arrangements will be introduced to accommodate these schemes.

Please contact Jerry Moriarty, Head of the Investigations and Compliance Unit in the Board by not later than Wednesday 14 December 2005 if:

• Your scheme is an Irish registered pension scheme which has UK members.

• By doing this you will let us know that your scheme needs to get authorisation and approval for it's cross-border operations and we will advise you of the appropriate steps to take.

• The final date for application for authorisation by a UK/Ireland scheme to continue to engage in cross-border activity is 31st March 2006.

• It will be for each scheme to elect whether to continue to operate on a cross-border basis and, if it wishes to do so, to apply for authorisation before 31st March 2006.

18 November 2005

Position of UK/Ireland schemes under the EU IORPS Directive

For purposes of Irish regulation, a UK/Ireland scheme is a scheme registered in Ireland which has members in the UK. Formerly, employers based in Ireland were permitted to have their UK based employees (whether working in a UK subsidiary or in a UK branch) included as members of the Irish registered pension scheme rather than requiring a separate UK scheme to be established for such individuals. Reciprocal provisions applied in the case of UK employers with employees in Ireland. Since 1994, no new UK/Ireland schemes could be established. However, UK/Ireland schemes in existence prior to that date may continue to operate and accept new members. Currently these schemes are regulated, for Irish purposes, under Occupational Pension Schemes (Schemes with External Members) (United Kingdom) Regulations 2000, S.I. No.470 of 2000.

Article 20 of Directive 2003/41 on the Activities and Supervision of Institutions for Occupational Retirement Provision (commonly known as the IORPs Directive) requires schemes which engage in cross-border activities to receive a prior authorisation and to fulfil certain ongoing conditions. There is a possibility that UK/Ireland schemes come within the scope of this Article.

The UK and Irish authorities are currently in discussions with the European Commission to determine whether, and, if so, how the requirements of Article 20 of the Directive should apply to UK/Ireland schemes. We do not expect that these discussions will be finalised by the 23 September 2005, the date by which the Directive is required to be implemented into national law. We have advised the Commission that Ireland will continue to allow UK/Ireland schemes to operate “as is” and without regard to the provisions of Article 20 of the IORPs Directive until we receive concluded advice from the Commission as to whether or not such schemes come within the scope of Article 20.

31 August 2005