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‘More intrusive’ oversight by pensions watchdog
Pic: RollingNews.ie

04 Oct 2022 / regulation Print

‘More intrusive’ oversight by pensions watchdog

The Pensions Authority secured convictions in three of six prosecutions it took last year, according to its annual report.

Two cases were linked to the deduction and non-remittance of employee pension contributions to a pension scheme within the timeframe set out under the Pensions Act 1990, while one case was related to the non-remittance of employer contributions to a scheme.

The annual report stated that three other cases were struck out due to the payment of arrears, or the issue being rectified in advance of the court date.

New investigations

The pensions watchdog also opened 15 new investigations into alleged breaches of pensions legislation last year.

These varied from deduction and non-remittance of pension contributions to failure to reply to a statutory request for information. During the year, 24 investigations were finalised and closed.

The watchdog also held 20 meetings with trustee boards, as part of a strategy to examine how well-equipped schemes are to meet the requirements of an EU directive, IORP II, which was transposed into Irish law last year.

Fees warning

Writing in the annual report, chair Dr David Begg said that the obligations on scheme trustees under the directive were much more demanding, complex, and detailed than they had been before.

He also warned that this would also require a “more comprehensive, challenging, judgement-based, and intrusive oversight” by the Pensions Authority.

Dr Begg also said that further increases in fees for occupational schemes would be needed in the coming years to fund the extra regulatory resources needed by the watchdog. An increase had already been approved with effect from 1 January this year.

In a separate statement, Pensions Regulator Brendan Kennedy said that, although much had been achieved by schemes in terms of compliance with the EU directive, in some cases “there has not been as much progress as the authority would have expected”.

One-member arrangements

While the watchdog is satisfied that the bigger schemes have met the basic standards expected under IORP II, it has now begun auditing the compliance of newly established one-member pension arrangements.

“Where non-compliance is identified without any evidence that serious remedial actions are in train, the authority will consider all available options to secure compliance. Where the facts and circumstances merit it, this may result in a decision to prosecute,” Kennedy warned.

The transposition regulations allowed pre-existing one-member arrangements until April 2026 to comply with most new IORP II obligations.

“It is important to make clear, even at this early stage, that this is the date by which such schemes should be fully compliant, and therefore the work on achieving this should begin much sooner,” Kennedy said.

Gazette Desk
Gazette.ie is the daily legal news site of the Law Society of Ireland