I propose to take Questions Nos. 1193, 1210, 1211 and 1229 together.
As the Deputies may be aware, the supervision of compliance with the requirements of the Pensions Act 1990 (‘1990 Act’), including new IORP II related requirements introduced into that Act, is the responsibility of the Pensions Authority, which is the regulator for pensions in Ireland. The Pensions Authority is an independent statutory body, and, consequently, the Deputies will appreciate that it would not be possible or appropriate for me, or my officials, to interfere with the Pensions Authority’s compliance supervision function or to direct the Pensions Authority to extend any compliance deadline. Furthermore, IORP II requires Member States to ensure that competent authorities, such as the Pensions Authority, conduct their tasks in a transparent, independent and accountable manner.
Directive (EU) 2016/2341 of the European Parliament and of the Council of 14 December 2016 on the activities and supervision of institutions for occupational retirement provision (IORPs) (‘IORP II’), which became effective from 13 January 2019, sets out minimum standards for the management and supervision of pension schemes, with the objective of ensuring the soundness of occupational pensions and better protections for scheme members and beneficiaries across the European Union.
IORP II requirements were transposed into Irish law by way of the European Union (Occupational Pension Schemes) Regulations 2021 (S.I. No. 128 of 2021) which came into force on 22nd April 2021. The general principle followed in respect of the transposition of IORP II, in keeping with the Government’s Roadmap for Pensions Reform, is that the requirements of IORP II apply to all schemes and trust RACs, including one-member arrangements (‘OMAs’). This is in order to ensure that all members and beneficiaries are afforded equal protection irrespective of the size of the pension arrangement. It should be noted that the decision to apply the requirements of IORP II to all schemes and trust RACs was announced by the Government in 2019 and it was expected that trustees and insurance providers would have been preparing for compliance with these requirements in advance of transposition.
The application of IORP II is prospective, not retrospective. This means that existing investments made, or borrowings entered into, by OMAs prior to S.I. No. 128 of 2021 coming into force on 22nd April 2021 can remain in place. As of that date –
- in the case of OMAs which were already established –
- IORP II investment and borrowing rules will apply only to new investments or borrowings entered into by such arrangements, and
- a five-year derogation from that date applies in respect of other new IORP II requirements,
- in the case of OMAs established on or after that date, such arrangements are required to meet all new IORP II related requirements set out under the 1990 Act, where applicable, from the date on which they were established. From a supervision perspective, the Pensions Authority has, however, outlined that it was applying a deadline of 1st July 2022 in respect of OMA’s compliance with those new requirements.
The Report of the Interdepartmental Pensions Reform and Taxation Group (IDPRTG), which was published in late 2020, set out a number of measures to help advance the goal of simplifying and harmonising the supplementary pension landscape including some recommendations in relation to PRSAs. A group comprising officials from the relevant Departments and organisations reconvened in 2021 to consider implementation of the various recommendations. To this end, a package of measures was enacted in the Finance Act 2021 which included: the removal of a prohibition of transfers from an occupational pension scheme to a Personal Retirement Savings Account for members with more than 15 years’ service; the abolition of the Approved Minimum Retirement Fund; and the extension of an Approved Retirement Fund option to death-in-service benefits.
The IDPRTG implementation group continues its work considering the various recommendations with a view to bringing further reform measures to legislative effective as soon as possible. In this regard, a number of proposals from the 2020 Report are currently being examined and worked on, some of which are technical in nature and others, which have wider policy implications, necessitating careful consideration through the normal policy channels. Of course, any measures requiring legislative change will have to complete legislative passage through the Oireachtas and there can be no guarantees until the relevant Bill is signed into law and enacted.
The Deputies can be assured that I and my officials will continue to closely monitor developments in relation to supplementary pension arrangements and will, where necessary, work towards putting in place appropriate policy responses.
I hope this clarifies the position for the Deputies.
