Public Sector Pensions Public Sector Pensions

The Regulatory The Regulatory PerspectivePerspective

Grace GuyThe Pensions Authority

20 November 2014

Focus

• Overview of Irish pensions landscape

• Duties and responsibilities of trustees/ administrators under the Pensions Act

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The Pensions AuthorityEstablished by the Pensions Act, 1990

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The Pensions Authority

• Key objectives

– No pension monies are misappropriated– Members receive full entitlements– Schemes properly funded– Pension assets are appropriately

invested– Disclosure of information - Members

appropriately informed

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Overview of Irish Pensions Landscape

• 3 pillars

– State pension

– Occupational pension schemes

– Personal pensions

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Overview of Irish Pensions Landscape

• Pillar 1: State pension– Contributory pension of maximum of €230.30 per week– Means-tested non-contributory pension of €219 per week

• Pillar 2: Occupational pension schemes– Employer sponsored DB and DC schemes– Operate on a funded basis (private sector/commercial state)

and pay-as you go basis (public service)– AVCs – top-up benefits

• Pillar 3: Personal pensions– Personal pension vehicles – Includes Personal Retirement Savings Accounts (PRSAs) and

Retirement Annuity Contracts (RACs)

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Pensions in numbers

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107 Public Service

Schemes

300,000 members

60,000 DC Schemes

230,000 members

800 Funded DB Schemes

190,000 members

200,000

PRSAs

200,000 RACs

Pensions coverage in the Irish Workforce

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100%

Public Sector100% coverage

40%

60%

Private Sector

40% have some form of private pension coverage60% do not have a private pension

Pension asset values

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• Approx. 80 bn Euro

Private Sector/

Commercial State Schemes

Annual PS pensions bill

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• Approx. 3 bn Euro p/a

Public Service Schemes

Public sector scheme legal requirements

• Legal responsibility with the scheme administrator

• Legal obligations set out under the Pensions Act

• Some carve outs but the following applies:– Registration – Fees– Disclosure obligations– Equality– Whistleblowing– IDR Procedure– Family Law

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Registration and Fees

Registration• Not later than 1 year after commencement• Changes to registration details must be notified

within 12 months

Fees• Annual fees must be paid in respect of each

scheme year by 31 March each year• Fee is based on number of active members

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Disclosure Obligations• Disclosure to members and others

– Pension benefit statement– Leaving service options letter– Information on retirement or death– Notification of grant of PAO– Constitution and basic information on the scheme– Annual report

• Disclosure to the Pensions Authority– Annual scheme information (ASI returns)

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Equality

• Discrimination prohibited on 9 grounds

• Certain exceptions for gender, age, civil status grounds

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Reporting obligations

• Mandatory reporting

• Voluntary reporting

• Protected Disclosure Act

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Regulatory Activity / Sanctions• Inspections/ investigations/ audits

• Powers in relation to non-compliance: – Prosecutions – all breaches of the Pensions

Act are a criminal offence– On-the-spot fines

• €2,000 per trustee/administrator– Late registration of schemes– Failure or delay in notifying amendments to the

Authority– Failure to provide required/requested information– ASIs

– High Court orders

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Conclusion

Ensure you:

• Know your legal obligations under the Pensions Act

• Comply with them• If in doubt, ask the Pensions

Authority for information

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Any questions?

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