The Pensions Authority (PA) of Ireland, in its Supervisory Activities Report for 2024, has highlighted several gaps in the governance of Irish pension funds, pushing for greater efforts to elevate governance standards within the country’s pension system.

The report provides an in-depth analysis of the oversight conducted at various pension schemes throughout the year. The comprehensive report sheds light on the PA’s efforts to ensure compliance and enhance governance within the pension sector.

In 2024, the authority initiated the Supervisory Review Process (SRP) as mandated by Section 26J of the Pensions Act. This process involved a thorough evaluation of the strategies, processes, and reporting procedures established by pension scheme trustees.

The primary objective was to assess the governance systems, identify potential risks, and evaluate the trustees’ capacity to manage these risks effectively. The initial phase of the SRP focused on six multi-employer master trusts, with plans to extend the review to other defined benefit (DB) and defined contribution (DC) schemes in subsequent phases.

The SRP unveiled several critical observations:

  • governance structures – a number of pension funds exhibited deficiencies in their governance frameworks, including unclear delineation of roles and responsibilities among trustees and key function holders;
  • risk management – some pension funds lacked comprehensive risk-management strategies, particularly in identifying and mitigating emerging risks;
  • compliance issues – instances of non-compliance with regulatory requirements were noted, such as delays in submitting mandatory reports and inadequate documentation of trustee meetings.

In response to these findings, the PA has implemented monitoring programmes to ensure timely rectification.

Beyond the SRP, the authority has maintained active engagement with all master trusts and several large DB and DC schemes. This proactive approach aimed to foster a culture of compliance and continuous improvement.

Additionally, the authority conducted compliance audits across various pension funds and personal retirement savings account (PRSA) providers. These audits focused on adherence to regulatory standards and the effectiveness of internal controls.

The PA also carried out on-site inspections of registered administrators and trustee boards. These inspections provided valuable insights into the operational practices of pension schemes and facilitated direct discussions on areas requiring enhancement.

The hands-on approach underscores the authority’s commitment to ensuring that pension schemes operate with the highest standards of integrity and transparency, the report stated.

Implications for trustees and advisers

The findings from the 2024 supervisory activities serve as a crucial resource for all trustee boards and their advisers. The PA expects these stakeholders to:

  • review and reflect: assess their current governance structures and operational practices in light of the report’s observations;
  • identify gaps: pinpoint areas where their pension funds may be vulnerable or non-compliant;
  • implement improvements: develop and execute action plans to address identified deficiencies and enhance overall scheme governance.

By proactively engaging with the report’s findings, trustees and advisers can not only ensure compliance but also strengthen the trust and confidence of scheme members, the PA noted.

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