Ireland to regulate 'poor' pensions admin
IRELAND - The Irish government is to start regulating third-party administrators where they carry out scheme administration on behalf of trustees, in an attempt to improve 'poor' standards.
The Social Welfare and Pensions Bill 2008 is the second of two Bills implementing the social welfare Budget 2008 changes announced by the government in December 2007.
Pension changes within the Bill include amendments to the Pensions Act in relation to registered administrators of pension schemes, following the "Report of The Pensions Board to The Minister for Social and Family Affairs on Trusteeship".
The report by the Irish Pensions Board noted third-party administrators are currently unregulated in relation to their scheme administration work conducted on behalf of trustees, and which in some cases has resulted in "poor standards", according to the Pensions Board.
As a result, the Bill will require scheme administrators to register with the Board, and the Board would then have responsibility for auditing administration service provision and removing registration or applying sanctions if required standards are not met.
Jerry Moriarty, director of policy at the Irish Association of Pension Funds (IAPF), said the new legislation is trying to regulate the activities not carried out by trustees and to recognise when they are at fault rather than the trustees.
He said: " We see it as something which can help trustees, as it will make it clear exactly where the responsibility lies for any faults."
Additional amendments to the Pensions Act include the introduction of a requirement for formal trustee training, which again follows the results of the trusteeship report published by the Pensions Board.
Trustee training is considered important for pension scheme governance as it "assists trustees to develop the skill-set necessary to perform their duties and functions effectively".
The Bill also points out ongoing training would ensure trustees are kept up-to-date with regulatory developments and changes in the pensions landscape so "better-skilled trustees, performing effectively, will have a positive impact on pension scheme governance with consequent benefits for pension scheme members".
There has previously been no formal requirement for trustee training, but once the Bill is passed employers will have to arrange training for trustees within six months of their appointment and at least every two years afterwards.
The Bill will also require trustees to provide certain information to prove they have received training, while on-the-spot fines will be introduced for breaches of the training requirements.
Although Moriarty pointed out a lot of trustees already receive training for the role, he said the introduction of formal requirements, which are similar to those in the UK, would "certainly help trustees in what is becoming a more difficult area to work in."
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