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It is not clear that there will be any immediate significant legal implications for Irish occupational pension schemes of the UK exiting the EU. However, the effect on the investment market and the continued uncertainty around Brexit is likely to have more immediate and significant consequences for Irish defined benefit schemes and their sponsoring employers.

Many Irish defined benefit schemes are struggling with funding proposals that have gone off or may go off track as a result of poor market conditions. In addition, funding difficulties (and their associated impact on IAS liabilities of sponsoring employers) may trigger fresh scheme reviews and renewed focus on liability (and volatility) management.

Trustees and sponsors will need to consider with their investment and actuarial advisers what can be done to mitigate the risk of continued poor market performance in light of ongoing uncertainty during the proposed transition period. As required by the Pension Authority’s financial management guidelines, an important step will be identifying the main risks schemes are exposed to and what contingency plans can be put in place to reduce any negative impact. A general review of the scheme investment strategy and investment options may also be warranted.Continue Reading Implications of Brexit for Irish Occupational Pension Schemes

Since June 2012, under the Occupational Pension Schemes (Disclosure of Information) Regulations 2006, trustees of schemes which are subject to the statutory funding standard are required to submit an Annual Actuarial Data Return each year. Details of the Return are set out in the Disclosure Regulations which must be completed by the scheme actuary and submitted to the Pensions Authority within 9 months of the end of the scheme year.

In the period up to 31 March 2016, the Pensions Authority received 699 Returns and has now published a summary of the information. A copy of the summary is available here. Points of particular interest include:Continue Reading Pensions Authority releases statistics for defined benefit schemes

Statutory Instrument No.229 of 2016, signed by the Minister for Social Protection on 5 May, represents another step towards the amalgamation of the offices of the Financial Services Ombudsman and the Pensions Ombudsman. The Government made the decision to merge the two agencies in May 2013, after a recommendation from the OECD.
Continue Reading Pensions Act amended to allow Financial Services Ombudsman to hold the office of Pensions Ombudsman

At the Irish Association of Pension Funds Annual Investment Conference held last week, Brendan Kennedy, the Pensions Regulator, reiterated the Pensions Authority’s continued focus on good governance and its plans for ramping up the Authority’s programme of engagement with trustees of defined benefit schemes. This engagement includes continuing to invite such trustees to meet with

Pension Adjustment Orders (PAOs) can raise difficult issues for trustees of occupational pension schemes.  Under the Family Law Acts trustees must be put on notice prior to a PAO being made and often the trustees are asked to review draft PAOs and confirm that they are capable of implementation.  This has the potential to expose trustees to liability.  Once the PAO is formally made by a Court it may prove very difficult to have it amended.  In order to reduce the risks of receiving a PAO which the trustees cannot implement, it is prudent for trustees to have a procedure in place for reviewing PAOs when they receive them.  Any issues which arise can then be dealt with as early as possible in the process.  These seven steps should assist with an initial review of a draft PAO and reviewing any final PAOs trustees receive.
Continue Reading 7 STEPS TO CONSIDER ON RECEIPT OF A PENSION ADJUSTMENT ORDER

Pensions in the context of outsourcing can give rise to complex and potentially costly issues.  Currently no special pension rules apply to public sector outsourcing, but it may be that future legislative changes, any legislation setting up the public body in question (or its pension scheme) or pursuant to which a given outsourcing is to be concluded contains special terms and conditions in respect of transferring employees’ entitlements and the obligations of the service provider under the outsourcing contract.

Outlined below are 8 key pensions issues which should be considered in the context of any public sector outsourcing.


Continue Reading 8 Key Pensions Issues to be aware of in Public Sector Outsourcing

Since 27 March 2013 members of pension schemes have been able to avail of a once-off early access option to additional voluntary contributions (AVCs) which they have made to their pension scheme. This option is provided for under section 782A of the Taxes Consolidation Act 1997 (the 1997 Act) and allows members to withdraw up to a maximum of 30% of their AVC fund prior to retirement.

When the legislation was first introduced last year it was unclear whether it overrode the express provisions of a pension scheme’s trust deed and rules and, in particular, whether an amendment to a scheme’s trust deed and rules would be required before an individual could avail of such an option. While the Department of Finance clarified that the intention of the legislation was to permit trustees to act on an instruction from members without an amendment to the rules, it acknowledged that trustees would need to take their own legal advice and indicated that if the issue caused real uncertainty it would consider including an amendment to section 782A of the 1997 Act in the next Finance Bill.

The Department has now, by virtue of the Finance (No. 2) Act 2013, amended section 782A of the 1997 Act. This amendment is intended to allow a member avail of the early access option notwithstanding anything contained in the rules of a scheme. This amendment reinforces the legislative intent to allow trustees to act on an instruction without an amendment to the trust deed and rules. However, it does not address all legal issues arising for trustees when making a payment on foot of an instruction under section 782A.

In particular, the amendment to the legislation does not provide trustees of pension schemes with a discharge in respect of any AVCs withdrawn nor does it prescribe the form of instruction required.  In such circumstances, it may remain prudent for trustees to consider an amendment to the governing provisions of their scheme to deal with such issues where members are exercising their option to avail of early access to AVCs on foot of section 782A.Continue Reading Finance (No. 2) Act 2013 – Early Access to AVCs and other provisions

Where a scheme is operated on an integrated basis, it reduces the pension entitlements of members to account for their State pension. A bridging pension is a supplemental pension which is sometimes paid to members who retire before the age at which the State pension is payable. Schemes may also reduce the contributions payable by

Pension issues can be a major factor influencing merger and acquisition activity.  Companies may pull out of deals due to uncertainty around pensions (especially uncertainty over the funding of defined benefit plans).  Pension plan deficits are now part of corporate life and how the deficit and the other pension issues will be dealt with needs to be considered early on in the deal. Outlined below are five pension issues we have seen arise in recent transactions and some solutions found to deal with them.
Continue Reading Five Key Irish Pension Issues in Corporate Transactions

The Pensions Board has recently confirmed that they will monitor trustee training compliance on an ongoing basis. Trustees are required to record in the scheme’s annual report that they have received the appropriate training as required by the Pensions Act and within the specified time limits.

Trustees will be interested to note that the Pensions