Irish Life Health
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Irish Life
Irish Life the largest life and pensions group and fund manager in Ireland, employing 2,000 people and servicing one million customers.
Irish Life Investment Managers
Managing assets in excess 39bn, ILIM manages money on behalf of multinational corporations, charities and domestics.

What you need to know about IORP II

What changes can Trustees expect from the IORP II legislation?

IORP II is expected to bring about a whole new set of responsibilities for all scheme Trustees, including:

Trustees must be 'fit and proper'. Fitness relates to the qualifications, skills and experience of each trustee, while proper dictates that each trustee is honest and diligent.

Trustees will need to appoint Key Function Holders (KFH) including a Risk Manager, Actuary and an Internal Auditor.

Trustees will be required to have Policies for pension scheme governance, including Conflicts of Interest, Administration, Confidentiality, Communications, Outsourcing of tasks and Remuneration.

A Trustee Manual must be drawn up for the Trustee board with policies, a governance plan, documentation associated with the plan, details of risk management/internal audit and minutes from the quarterly trustee meetings.

Trustees will need to develop a Communications Plan aimed at prospective, active, and deferred members and members approaching retirement. 

For further information see the Trustee section on the Pensions Authority website www.PensionsAuthority.ie

 

 

What changes can pension schemes expect from the IORP II legislation?

In addition to the new trustee responsibilities, IORP II is expected to bring about additional requirements for pension schemes including:  

A governance system and accompanying documentation.
A risk management system to identify, measure, monitor and report issues.
A digital communications system for engaging with members about their pensions. 
At least one fully qualified trustee on the board, with all board members subject to new minimum qualification and experience requirements.
Appropriate outsourcing agreements where applicable, with monitoring systems in operation.
   
   
  There will be significant cost and resource implications for schemes associated with these new requirements, so it will be important to understand and review the different options available.
   

What does this mean for Employers and Trustees?

The IORP II legislation is expected to transform the pension landscape. 

Employers and Trustees will need to review their pension arrangements and speak to their pension provider or adviser to decide the best way to prepare for these increased governance requirements. 

One alternative to consider is moving to a Master Trust.

Under a Master Trust, multiple non associated employers can subscribe to participate in one plan operating under a single trust, and all governance requirements are met centrally by the Master Trust and it's trustees.

Irish Life has a Master Trust solution which will evolve to meet both the IORP II requirements and any Pensions Authority guidelines.
 

What happens next?

When the IORP II legislation is made official, the subsequent Pensions Authority guidance is likely to include a time frame for schemes to comply with the new requirements.

This will be at the Pension Authority’s discretion, but early estimates suggest a timeline of 18 – 24 months after the law comes into effect. 

In the interim, the main thing is to ensure you have a good understanding of the likely new requirements and how they might impact your pension scheme, consider how each stakeholder might want to respond to these developments and stay informed as things progress. 

  

Stay Informed about IORP II

Irish Life will keep you informed on all things related to IORP II, sharing email updates when the legislation and associated guidelines are put in place. You can also contact your account manager for information at any point. 

To subscribe to these updates email us at askusaboutIORPII@irishlife.ie and keep checking in with us on LinkedIn and Twitter for the latest IORP II news.

The Pensions Authority have also issued information on IORP II which can be accessed on their website www.PensionsAuthority.ie