IRELAND - A report published today by the Irish Pensions Board has criticised existing oversight of administrators but stopped short of recommending an overhaul of the current trust model, which is said continued to offer "protections…that justify its retention".
The report focused its recommendations on administration standards - notably the regulation and supervision of pension scheme administrators and boards' disciplinary powers. However, the recommendations retained for the Pensions Board powers to appoint trustees and authorise administrators to wind up funds.
It also recommended the institutionalisation of service level agreements with administrators and more training for trustees. "Ongoing, quality trustee training [is] the exception rather than the rule," concluded the report's authors.
Social affairs minister Seamus Brennan originally commissioned the report to evaluate the existing model, identify potential governance improvements and examine existing support for trustees. The explicit objective of the board was to improve governance standards without adding to the compliance burden on schemes and their trustees.
More generally, the report is a response to changes in trustees' role brought about by regulatory pressure - including the EU pensions directive - changes in accounting standards, and pension scheme funding issues.
"Increasing pressures on trustees have encouraged fresh examination of the trustee role and how (or whether) trustees can continue to contribute positively to pension scheme governance," said the report, which took its cue from current debates not only in Ireland but also in the UK.
A paper authored by a ministerial official last year had questioned the internal governance of trust-based pension schemes, highlighting the potential for conflicts of interests among employer-nominated trustees of defined benefit schemes. However, the paper concluded that no significant conflicts had emerged.
Trustees oversee around €80bn of pension scheme savings.