by Peggy Hughes, Pensions Law Team, Mason Hayes & Curran
The Pensions Authority published its Statement of Strategy 2016-2020 on Friday 4 March. While the general thrust of the strategy had been revealed in January, the industry now has the final document from which it may consider itself forewarned of the regulation priorities of the Authority for the five years ahead. Now is the time to consider how to be forearmed for what lies ahead.
The Pensions Authority’s Statement of Strategy 2016-2020 sets out the Authority’s vision, mission, values and strategic objectives, which will guide it in undertaking its functions for the next five years. The strategy will be reviewed at mid-term to assess whether it remains appropriate.
The Authority’s vision is for a pensions environment where pensions savings are secure, well-managed and understandable and which encourages pensions savings. The Authority’s mission is to foster public confidence by providing effective and efficient pensions regulation, to support trustees and the public by providing guidance and information and, finally, to provide expert advice to the Minister for Social Protection to help inform the development of pensions policy.
The Strategy identifies the key challenges and opportunities to the Authority’s operating environment. These include economic and fiscal issues such as the continued, though improved, high unemployment rate alongside the prevailing uncertainty in international economic developments and on going low interest rates. The Authority is and will be heavily involved in advancing proposals for pensions reform and simplification. Such reform will include proposals to reduce the number of defined contribution pension schemes and proposals on Personal Retirement Savings Accounts (“PRSAs”), most notably in the areas of charges and tax reliefs and transferability into PRSAs.
Given the value of defined benefit liabilities at some €60 billion, the Strategy states that it remains very important for trustees to adopt and maintain good financial management practices and to have processes to identify and mitigate risk within such schemes.
The Authority is conscious of the expectations of retirement savers in relation to those who have charge of their savings and of the Authority as regulator. Consequently, the compliance obligations of those involved in pensions are predicted to grow and may include further obligations imposed from EU level. The Authority accepts that there is an increased demand for guidance on meeting regulatory obligations and also reinforces its role as promoter and supporter of compliance with the Pensions Act and to address non-compliance. Perhaps the most important section of the Strategy document is that set out as the Risk Priorities Appendix. The Authority makes it clear that its approach to supervision is based on a hierarchy of the said risk priorities.
If you want to be forearmed to meet at least some of the advancing regulation of the Authority you would be well advised to review the hierarchy of risk priorities as they apply to you. Assess your own scheme(s), identify any issues relating to the risk priorities and act to put any necessary measures in place to ensure that those risks can be eliminated or reduced. Equally important is to ensure that communications with the Authority are not ignored as it “will especially target failure to provide the Authority with information including whistleblowing obligations..” If in doubt take suitable advice, but ignore the Authority and fail to act at your peril!
The content of this article is provided for information purposes only and does not constitute legal or other advice.
About the author
Peggy leads the Pensions Law Team within the Employment Law and Benefits Team at MHC. She is an experienced pensions lawyer who has worked in-house and in private practice on pension law related matters.
Peggy has advised sponsoring employers, both Irish and multinational, trustees of pension schemes (both lay and professional) and individuals on a wide range of pensions related issues including their respective obligations, duties and rights under relevant law, service/contractual and pension scheme documentation. She regularly advises on the pensions aspects of corporate transactions.
Peggy has also advised on pensions law as applicable to insurance companies in relation to their pension products and related documentation.
