Irish DC schemes are likely to migrate to a master trust after the implementation of the IORP II Directive, delegates at the Irish Association of Pension Funds (IAPF) conference in Dublin heard.
New Ireland Assurance pension specialist and IAPF DC Committee George Nolan said at the Annual DC Conference that after the implementations, DC schemes can either continue the existing scheme, restructure or set up a new scheme, but that they most likely will move towards master trusts.
“We expect it to be regulated heavily, no doubt about that,” Nolan said, but that what the regulations will be is still unclear.
“The IAPF DC Committee has a sub-committee to look at this stuff on behalf of trustees and try and get our head around it, and see if there are efficiencies and simplifications that we can suggest or help with.
“We have met with the Pensions Authority, and it is great that they are up for this, understand it and recognise the complications that exist, so hopefully between us we can come up with some suggestions that will make this a lot simpler for employers,” he said.
Discussing potential challenges, he said that under the current system, it is important to not exclude preserved members.
“Trustees must find a place for them, but are they getting the best in terms of price and services by having that option, would they be better in the scheme? Arguably they will.”
He also said there could be a place for preserved members in the buy-out bond, but that the bulk transfer regulations, which came into effect in 2009 will need to change, and that trustees cannot be left with legacy issues. Legacy issues, wind-up and the ‘lift-and-shift’ option should be separate.
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