Ireland: Pensions Winter Update

Last Updated: 20 February 2019
Article by Arthur Cox
Most Read Contributor in Ireland, May 2019

Authors: Philip Smith, Catherine Austin, Sarah McCague, Michael Shovlin, Daniel Watters, Aisling Ryan and Grace Moore

Social Welfare, Pensions and Civil Registration Act 2018 (the "SWPA 2018")
The SWPA 2018 was signed into law on 24 December 2018. It deals with the usual business of revising social welfare and state pension rates (effective from March 2019) and also provides for equal benefit rights for same sex couples. The SWPA 2018 did not deal with many of the previously proposed amendments to the Pensions Act such as minimum notice periods for pension scheme wind-ups and 'debt on the employer'. It is possible that those amendments will be reintroduced when a similar bill goes through the Oireachtas in 2019.

Brexit
In light of the political uncertainty surrounding Brexit, and (at time of publication) the possibility of a delayed Brexit, the immediate impact of Brexit on the pensions sector as a whole is not currently known. Regardless of whether there is a deal or no deal Brexit, the UK leaving the EU may have an impact on certain overseas investments (in particular those serviced through the UK), insurance and cross-border schemes. Trustees, with their investment advisors, should consider whether steps ought to be taken, for example, to novate existing agreements with UK managers and custodians to other EU affiliates or agree delegation or sub-delegation arrangements to affiliates.

IORP II
IORP II (Directive (EU) 2016/2341) ("IORP II" or the "Directive") was required to be transposed into Irish law on 13 January 2019. Regulations under the Pensions Act are currently being drafted to transpose the Directive into Irish law. Codes of practice in relation to IORP II will be issued by the Pensions Authority. It is expected that these regulations and codes of practice will not be published until at least the end of March 2019.

IORP II: direct effect for emanations of the State
From 13 January 2019, IORP II has direct effect on emanations of the State. This means that although the implementing domestic regulations have not yet been introduced, IORP II is directly effective against bodies considered to be under the control of the State that provide public services where the relevant provisions of the Directive are sufficiently clear, precise and unconditional.
While EU directives are not directly effective against individuals (including private sector pension schemes or the trustees of same), in the event of a dispute ending up before the courts, Irish domestic laws may be interpreted in accordance with IORP II giving rise to indirect effect where the courts consider that the Directive is sufficiently clear, precise and unconditional such that parties are capable of giving effect to it.

IORP II: key provisions
Without sight of the domestic regulations, it is not clear exactly how IORP II will be implemented in Ireland. However there are a number of issues for trustees to consider now in relation to IORP II, including:

1. Disclosure requirements
IORP II sets out that Member States shall require schemes to publicly disclose annual accounts and reports which must give a "true and fair view" of the assets, liabilities and financial position of the scheme. Trustees should consider the consequences of the requirement to publicly disclose annual accounts and reports which are required to be approved by "duly authorised persons". Considerations might include the form of such accounts and reports, media coverage and the privacy and data protection rights of certain members or beneficiaries who may be identifiable from publishing such annual reports.
IORP II also requires that a scheme's statement of investment policy principles ("SIPP") be made publically available. The SIPP must include information on how the investment policy takes environmental, social and governance factors into account. Currently, this is an internal document and trustees may wish to review the content of their SIPP now that it is to be published.
Finally, trustees need to review the content of their scheme benefit statements to ensure compliance with additional IORP II requirements. These include a requirement to provide a breakdown of the costs deducted in the previous 12 months.

2. Requirement to be fit and proper
The composition of trustee boards is expected to be revised to meet the Directive's requirement that the board is collectively "fit and proper". Trustee boards should consider compiling CVs of all board members to ensure the board has an up-to-date record of trustee qualifications and experience in order to inform their decisions made about the composition of the trustee board once the implementing regulations are introduced.

3. Key Function Holders
Under IORP II, schemes are required to put in place the following three key functions: (a) risk-management; (b) internal audit; and (c) actuarial (where applicable). Please see our Autumn update here for more details. We await the implementing regulations in relation to the practical consequences for trustees. In the interim, trustees should review risk management and audit arrangements to prepare for updating or implementing these arrangements as appropriate in the near future.

4. Deferred members
Due to the requirement under IORP II to provide deferred members with pension benefit statements, trustees need to undertake data verification exercises to ensure they hold the correct contact information for deferred members. Please contact us if you would like further advice on how to conduct a data verification exercise in a GDPR-compliant manner.

5. Governance manual and checklist
As the volume of prescribed or advised policies and procedures increases, trustees should consider producing a comprehensive governance or board manual documenting the role and responsibilities of the trustee board, the policies and procedures the trustee board has in place and a schedule of review dates. Doing so would ensure trustee alignment with the Pensions Authority's interim guidance. Trustees may also wish to consider putting a governance checklist in place to keep track of how the trustee board is complying with existing and new regulatory requirements.

6. ESG
Under IORP II, the system of governance adopted by the trustee board is to include consideration of environmental, social and governance ("ESG") factors. Trustee boards may wish to consider putting an ESG policy in place.

Although we await domestic regulations, trustee boards can start considering now how they wish to proceed to ensure compliance with IORP II.
Please contact us if you require further advice on new requirements under IORP II or assistance in drafting an ESG policy, a board manual or governance checklist.

Download PDF

This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions