IRELAND – The Department of Social Protection (DSP) has announced an overhaul of Ireland's pension regulation, splitting responsibility for enforcement and policy advice between two committees to avoid regulatory capture.
Joan Burton, minister for social protection, said this week's publication of the OECD review of Ireland's pension system made clear the need for "a far stronger consumer focus" – resulting in the creation of the Pensions Council, which will be tasked with devising pension policy with the consumer "at its heart".
While current Pensions Board chief executive Brendan Kennedy will remain head of the new regulator, to be renamed the Pensions Authority, a significantly smaller three-person Pensions Commission and independent chairman will be responsible for guaranteeing the industry abides by regulation.
Commenting on the changes, Burton said: "The separation between regulatory oversight and policy development will ensure there is no perception of regulatory 'capture' by the industry and give greater confidence to consumers.
"I look forward to the new Pensions Council bringing a fresh perspective to the formulation of pension policy that has the consumer at its heart.
"The first task I will be giving the Council will be to monitor the implementation of the recommendations in the 'Report on Pension Charges' and advise me if further actions are needed."
The report was criticised by the Irish Association of Pension Funds (IAPF) for highlighting the "worst charges possible".
However, it overall found that large occupational defined contribution (DC) funds charged 0.73% – far from the average fee of 2.2% the government cited as widespread.
Burton called on the industry to offer clear and concise communication on fees and warned that she would have "no hesitation" to introduce legislation strengthening compliance if a review next year did not reveal increasing transparency.
A DSP spokeswoman told IPE that matters relating to the size and composition of the board were "under consideration" and once again stressed the increased consumer focus of the new body.
It remains unclear whether it will have equal numbers of employee and employer representatives, but such detail will to be published with the forthcoming Social Welfare and Pensions Bill.
Jerry Moriarty, chief executive of the IAPF, told IPE: "Having a distinction between the regulatory role and the policy role is important, and that's probably important for the Pensions Board itself."