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Lack of draft IORP II legislations puts pressure on Irish trustees - IAPF

29/11/2018 Posted by IAPF | Comments(0)

The Irish government is waiting until the eleventh hour to draft IORP II pensions legislations still unseen by trustees six weeks before the implementation date, according to the Irish Association of Pension Funds (IAPF).

The European Pensions Directive is set to be transposed into Irish law on 13 January 2019, leaving the industry in the dark with no time to adjust and comply.

The concerns around the IORP II Directive were discussed at the IAPF annual governance conference in Dublin, where the attendees heard how the “disappointing approach” to meeting this deadline is at odds with the stance it is taking in other areas of pension reform, referring to the 2022 auto-enrolment plans.

Speaking ahead of the event, IAPF chairperson Peter Fahy said the government is way behind on the IORP II schedule. He said: “Assuming the government meets the implementation deadline at this late stage, it will still not allow trustees any realistic opportunity of complying with the new requirements by the 13 January deadline.”

“They have left it extremely late to act and have not granted pension trustees and employers any opportunity to consult on how the directive, which provides for proportionate implementation, should be implemented in Ireland.”

IAPF said in a statement that failure to publish the draft legislation in advance of the deadline will make consultation and feedback impossible and place huge pressure on schemes to comply with their obligations by the deadline set by the EU.

IORP II will introduce new governance and disclosure requirements for occupational pension plans within the EU. This means that some trustees will be required to have specific qualifications and experience, while giving greater consideration to risk management and report on how they take environmental, social and governance factors into account.

According to IAPF, the additional governance requirements could lead to the consolidation of smaller schemes into larger arrangements such as master trusts, an important objective of the regulator, the Pensions Authority.

The IAPF also called for the exemption for schemes of less than 100 members from some of the provisions, at least until structures like master trusts and auto-enrolment is in place.

“We have serious concerns that adding additional onerous regulatory requirements to smaller schemes at this time would merely result in employers discontinuing those schemes with no alternative being put in place until the new Master Trusts are available or until auto-enrolment has been introduced. This is clearly not in the interests of the members of those schemes,” Fahy said.

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