The Pensions Board is a regulatory agency under the aegis of my Department and is responsible for regulating occupational pensions. There is no cost to the Exchequer for the administration of the Pensions Board as the costs are borne by way of fees on pension schemes. For information, the 2012 costs were: total income €5.6; total expenditure €6.6 million; administration €6.5 million; accommodation €0.7 million. The average number of staff employed was 48.
In relation to amalgamation, the Public Service Reform Plan, designated two public institutions engaged in the oversight and operation of the Irish pension system for a critical review:
- The Pensions Board with a view to integrating its regulatory functions within the Central Bank
- The Pension Ombudsman with a view to amalgamating it with the Financial Services Ombudsman.
A Steering Group chaired by Mr Richard Hinz of the World Bank, (comprised of senior representatives of the affected institutions, the Pensions Board, the Central Bank, the Office of the Pensions Ombudsman, the Financial Services Ombudsman and the Departments of Social Protection, Public Expenditure and Reform, and Finance) was established to undertake a review of the proposed amalgamations.
In relation to the Pensions Board, the recommendation of the Steering Group was not to integrate the regulatory function with the Central Bank at this time. The Steering Group did make recommendations in relation to the governance structure of the Pensions Board and these were approved by Government. The governance changes are as follows:
- Replace the current 17 person paid board with two bodies, a body which will provide operational oversight of the regulatory function with an independent chair and 2 ex officio members of government bodies and a policy advisory board (the Pensions Council);
- The Pensions Council will be comprised of unpaid members (up to 12) that encompass the balanced representation of the full range of relevant stakeholders, and act as an advisory body to the Minister. The Pensions Regulator, the Central Bank, the Department of Public Expenditure and Reform and the Department of Social Protection will be permanent members of the Pensions Council.
- The Pensions Council will report to the Minister/Department of Social Protection;
- Nominating bodies as currently set down in the legislation will be removed;
- The Pensions Board will be renamed the Pensions Authority to ensure public awareness and clarity of its role and functions;
- The Chief Executive of the Pensions Authority will be known as the Pensions Regulator.
These amendments are currently being brought in the Social Welfare and Pensions (Miscellaneous Provisions) Bill 2013.
These changes represent a modernisation of the governance structure of the Pensions Board – which was established in 1990 with a social partnership structure. The new structure provides for separation of the regulatory oversight of occupational pensions from the policy advice.
Policy advice will be provided by the Pensions Council which will be composed of stakeholder representatives. The nomination structure in the existing legislation is being removed and guidelines will be developed to provide for a broader, more consumer based representation on the Pensions Council. Savings of approximately €100,000 will be generated by the replacement of the paid Board members with unpaid representatives.
