The Irish pensions regulator has published its strategy statement for 2022-2024, suggesting “considerable consolidation” of pension schemes would be needed to deal with the requirements stemming from the EU pension fund directive and that it would pay close attention to this.
The transposition of the IORP II Directive, which finally happened in April last year,
requires the Pensions Authority to oversee schemes on a forward-looking
risk-based supervisory basis, and imposes new and more demanding
obligations on many pension scheme trustees.
“In many cases,” the Authority said in its strategy document, “these
obligations require a level of complexity and detailed process that is
considerably beyond their current practices.
It added: “It will not be practical or economic for many schemes to
comply with these new obligations, and the trustees and the sponsoring
employer will have to consider multi-employer master trusts or [Personal
Retirement Savings Accounts (PRSAs)] as a better means of retirement
provision. Neither is it practical for the Authority to apply
forward-looking risk-based supervision to tens of thousands of pension
schemes.
“It is difficult to see how trustee compliance and forward-looking
risk-based supervision can be achieved without considerable
consolidation of pension schemes.”
The Pensions Authority said it would review its strategy at the end
of 2023 to evaluate progress. A key focus, it said, would be to
determine how many schemes had wound up and transferred members and
assets to multi-employer schemes or to PRSAs.
“If the numbers of schemes are not reducing significantly, we will
have to assess whether a new or revised strategy is required to achieve
our objectives.”
In its strategy document, the Pension Authority also noted that the
complexity of the demands on scheme trustees was likely to increase with
regard to the application of environmental, social and governance
factors to trustee investment decisions...
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