Irish pension trustees should undertake a “frank” self-assessment to prepare for the IORP II Directive, according to The Pensions Regulator, Brendan Kennedy.
Speaking at the Irish Association of Pension Funds’ (IAPF) Governance Conference yesterday, 23 November, Kennedy raised concerns about the number of trustees that have not engaged with the requirements of the directive.
“The explanation almost always is that they do not want to spend any money until the actual transposition takes place and they know the details. I understand and respect trustees’ reluctance to spend money that may be wasted. But nonetheless, I don’t accept that delay to the transposition is a valid excuse for doing little or nothing,” he stated.
“Of course the fine details are not known, but there are many important aspects of the directive which are well known and will not change significantly in the transposition. If you are a board of trustees who only do something when it becomes a legal obligation, you are not a good board of trustees and you do not understand your role.”
Therefore, he suggested trustees undertake a self-assessment, which could look at a number of things. This in includes assessing proactivity, capabilities, financial controls, understanding of the scheme, oversight of providers, risk function and the decisions being made.
During the speech, Kennedy also revealed that guidance from The Pensions Authority is not likely to be made available to schemes until after the transposition of the directive has taken place. It is still not known when transposition will be complete; in August, Kennedy said it would be complete by the end of 2020 but it is now expected early next year.
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