Background

As a result of increased compliance obligations for trustees of occupational pension schemes arising directly from the implementation of the European 'IORP II' Directive by The Pensions Authority, a large-scale and market wide movement of private sector defined contribution occupational pension schemes to Master Trusts is currently underway.

As matters stand, the arising issue means that no payment will be made to the beneficiary of a Contingent Benefit Pension Adjustment Order on the death in service of a member of a scheme which has moved to a Master Trust. The potential financial loss to such a beneficiary may be in the region of several hundred thousand euro (depending on the value of the contingent benefit).

Engaging in the public interest

The Law Society believes that issue is of such severity that emergency legislation is required. The Society has engaged constructively with the Pensions Authority to discuss the issue, and proposed a potential solution to prevent further impact to affected consumers. Practitioners have also been notified so that they can protect the interests of their clients.

For more information, read the Bulletin to Practitioners of 2 March 2023.