The Irish Pensions Board must develop a “clear, overarching vision” for the future of defined contribution (DC) regulation, rather than try to address individual concerns on a piecemeal basis, the Society of Actuaries in Ireland has said.

The Society said it recommended a “fundamental” overhaul of DC in the country once the regulator had settled its plans, and that the redesign should be based around its proposals for the future of the pension system.

In its response to the Pensions Board consultation on the future of DC regulation, the Society also urged the regulator to move away from proposals that would see the new standards only applied to younger funds.

“If schemes are required to meet a particular standard to be approved by the Board, we recommend this be signposted in advance, with the new standards applying for all schemes from a date in the future,” it said. 

“This will give existing schemes time to transition to the new standards, and many new schemes are likely to aim to meet the standards from inception, but it would mean a single set of standards applying in the market place.”

It also said the regulator should not seek to apply a blanket understanding of risk across all investment strategies, rather taking the personal circumstances of members into account – “in particular, the time remaining to the DC member’s planned retirement date”.

The society further called for a debate around the model of trusteeship in Ireland, and said it would be “beneficial to determine if the benefits of the trustee model could be more effectively delivered in another way”.

“We suggest it would be worthwhile to explore possible alternatives to the trustee model in detail, rather than solely focusing on adding further complexity to the role of the trustee,” it said, without elaborating on how a replacement model for trusteeship could look.

The society’s views clash with those of Trustee Decisions head James Kavanagh, who, while speaking at a public consultation by the Pensions Board last month, called for his industry to be “more professional in [their] prudential role”.

The actuarial group also said that, in attempting to lower the cost of DC provision, the Board should be mindful of the complexity of the current system acting as a “significant” driver of costs and suggested this was a further reason to ensure simplicity.

It added: “Given the potential complexity for trustees to make fee/charge comparisons, trustees would benefit from Pensions Board guidelines/training setting out the factors that should be considered when assessing value for money.”

It said such guidance should focus not only on fees but quality and service provided, “as well as the ultimate goal of promoting good outcomes for members”.