Photo of Aoife Malone

The Minister for Social Protection, Leo Varadkar, has this week published the General Scheme of the Social Welfare and Pensions Bill 2017. The General Scheme is an initial draft of a bill which is then subject to pre-legislative scrutiny before being finalised. While in the normal course it could take some months for a General Scheme to be reviewed and scrutinized, the Minister has indicated that he intends for the final bill to be enacted before the Dáil breaks for Summer Recess (normally towards the end of July).

Key points:

  • Sponsoring employers to be required to give 12 months’ notice before ceasing contributions to defined benefit pension schemes and to continue paying contributions to the scheme during that period;
  • Employers of schemes which do not satisfy the minimum funding standard / funding standard reserve, to be required to enter into funding negotiations with the trustees;
  • Proposed power for the Pensions Authority to impose contribution obligation on sponsoring employers; and
  • Extension of spouse’s pensions to civil partners and same-sex spouses in certain circumstances.

Continue Reading General Scheme of the Social Welfare and Pensions Bill 2017: statutory notice periods, debt on the employer and implications for scheme funding

Photo of Aoife Malone

The Pensions Authority has recently published a consultation document that proposes several reforms in relation to private pension schemes in Ireland. The stated aim of the Authority is to ensure that pension schemes are fit for purpose which, in the Authority’s view, means the schemes should be “well managed, cost efficient and understandable to their members”. As part of the consultation process the Authority will be hosting a question and answer session next Thursday, the 15th of September at which interested parties can ask questions and share their views regarding the proposed reforms. Note: bookings for the Forum must be submitted to the Authority before close of business on Friday 9th of September.

As at 1 June 2016, there were 167,987 funded pension schemes in Ireland. Not surprisingly, therefore, one of the stated drivers for the Authority’s proposals is to reduce the number of pension schemes which the Authority has to supervise. The other drivers include low public confidence in pensions and an expectation of more rigorous regulation and supervision. The Authority wishes to move to more active oversight of pension schemes as opposed to pursuing breaches after the fact. The two main external drivers of reform are noted as the IORP II Directive which will need to be implemented by 2018 and the OECD’s Report on the Irish pension system published in 2013.

A brief summary of the proposals being put forward by the Authority is set out below. Submissions have been invited by the Authority in relation to the proposals in the period up to 3rd October 2016. Further information together with information regarding the Consultation Forum is available from the Pension Authority’s website.

Continue Reading Pensions Authority to host Pension Reform Consultation Forum

Photo of David Main

Between agenda items at a recent meeting of the Association of Pension Lawyers in Ireland conversation turned to the type of matters our various firms’ pensions practices are currently working on.

What was surprising was the amount and range of pensions-related litigation.  The issues being litigated included scheme wind-ups, employer capital reduction applications and creditors accessing funds within bankrupts’ pension arrangements.  The amount of current pensions-related litigation highlights the need to consider litigation risks and strategy at a very early stage in transactions that could prove contentious.

Continue Reading The Rise of Pensions Litigation

Photo of David Main

Background

New statutory requirements relating to funding defined benefit schemes have recently come into law with the coming into force of the Social Welfare and Pensions Act 2012 on 1 May and the publication of various pieces of statutorily binding guidance issued by the Pensions Board on 7 June.

The Act makes various changes to the Pensions Act 1990, principally, its sections relating to the funding standard and revaluation of preserved benefits. The Pensions Board’s guidance sets out the details of most interest.  Through various changes to the Pensions Act, much of the Pensions Board’s guidance now has the force of law.

Continue Reading New DB scheme funding requirements

Photo of David Main

The Pensions Board’s deadline for the submission of responses to its consultation on the simplification of defined contribution pension provision passed at the end of February.  The consultation sought views on a number of different issues. These ranged from the number of different pension vehicles to pension adjustment orders to disclosure requirements.

A&L Goodbody have been involved in the drafting of the response of the Association of Pension Lawyers in Ireland.  In general, the regulation of defined contribution pension provision works but we consider that it can be rationalised, streamlined and improved somewhat.  It is likely that there will be action on foot of the submissions sent to the Pensions Board.  We believe that any reform of the regulation of defined contribution arrangements in Ireland will be considered alongside a review of the fees charged by pension product providers. We also believe it will be considered in light of the auto-enrolment regime that was proposed some time ago which Government has indicated will be brought into effect at some point in the future. 

We wait to see what reforms will come of the consultation exercise and welcome the fact that this is an area in which the Board is being proactive in seeking to improve the regulatory framework.  One key challenge we see with pension provision in general is getting workers and other individuals who are under retirement age to engage actively with retirement saving.  Without such engagement, the full benefit of any regulatory simplification will not be seen.

Read more on the Pensions Board’s consultation request on the simplification of defined contribution pension provision