Friday 24 March 2017: Today, the Pensions Authority issues its summary of 2016 regulatory activity and plans for 2017.
Commenting on the release, the Pensions Regulator, Brendan Kennedy said: “Trustees of occupational pension schemes and PRSA providers have responsibility for over €100 billion of pension savings. The objective of our supervision and support work is to improve as far as possible the outcomes for pension savers. 2016 was another very busy year for the Authority. The focus of our regulatory compliance work in 2016 was an increase in direct engagement with regulated entities. This work included reviews of scheme governance and administration practices of trustees of both defined benefit (DB) and defined contribution (DC) schemes.”
Misappropriation of pension assets or contributions remains at the top of the Authority’s risk priorities. In 2016, 23 prosecutions were concluded where the Authority secured convictions in 12 cases. Defendants received the benefit of the Probation Act in two further cases and seven more were struck out due to payment of arrears. Two cases were dismissed on appeal. In total, fines of €20,850 were imposed by the Courts.
During 2016, the Authority carried out a series of data compliance meetings with the Registered Administrators (RAs) responsible for about 90% of schemes. The data submitted to the Authority demonstrates that although work is being undertaken by RAs to improve the quality of their data, further improvement is needed.
The Regulator said: “Regulated entities failing to submit accurate and complete data continues to be a concern for the Authority. We have dedicated additional resources to dealing with this issue. We have also increased our capacity for analysis and interrogation of submitted data. This will provide the Authority with better information to support our supervision and compliance activity.”
The Regulator confirmed the organisation’s ongoing objective to support trustees with guidance and information by saying: “In 2016, the Authority issued 11 Codes of Governance which set out the standards of behaviour expected of trustees. To support the trustees of DB schemes we published two additional guidance documents. The first sets out the Authority’s view of good practice in planning a DB scheme investment strategy and the second in preparing a Statement of Investment Policy Principles (SIPP). We expect to see increased use of these codes and guidance by trustees in 2017.”
The public consultation process on the Authority’s pension reform proposals was completed by the end of 2016 culminating in the submission of a draft report on ‘Governance and Simplification of Supplementary Pensions’ to the Minister for Social Protection at the end of January 2017. The draft report sets out recommendations for the reform of the supplementary funded private pensions system in Ireland. In formulating its recommendations, the objectives of the Authority are as follows:
- all schemes should be actively managed to a high standard
- the Authority should be able to oversee the running of schemes to the necessary detail and to intervene where beneficiary interests are under threat
- pension scheme savers should find it easier to understand the pensions system and should be supported to make the necessary decisions
- the number of schemes in Ireland should be reduced from the current approximate figure of 160,000 to a medium-term target of 100-150 active schemes, to facilitate effective oversight.
The new EU Directive on the activities and supervision of institutions for occupational retirement provision (IORP II) was adopted in 2016. The Authority will provide technical support to the Department of Social Protection in transposing the Directive into law by the EU deadline of January 2019. IORP II will extend the obligations of IORP I by imposing more detailed requirements in domestic law for the management, governance and supervision of Irish pensions. The Authority’s recommendations for reform were formulated independently of IORP II but are consistent with its requirements.
The Authority is conscious that scheme trustees and their advisors will need to have detailed information about their new obligations as soon as possible so that they have adequate time to become compliant. We are committed to providing regular updates throughout the coming year and thereafter.
As part of its advisory role and following a request from the Minister for Social Protection in February 2017, the Authority will carry out a review on the feasibility of changing the minimum funding standard and establishing a pension protection scheme and deliver a report to the Minister on this matter.
See the "Related File(s)" section of this page for the full "Regulatory activity and plans for 2017"
For further information contact:
Head of Operations
The Pensions Authority
Note to Editors
The Pensions Authority is the statutory body established by the Pensions Act, 1990 to regulate occupational pension schemes, trust based RACs and PRSAs. www.pensionsauthority.ie