Transcript of IPASS Annual Conference 2013 Pensions Regulation in Ireland David Malone Head of Operations The...
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- IPASS Annual Conference 2013 Pensions Regulation in Ireland
David Malone Head of Operations The Pensions Board
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- The Pensions Board Established by the Pensions Act, 1990
Supervision, regulation and enforcement Policy, legal and actuarial
Information and guidance
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- Types of private pensions Company Pension Schemes Defined
benefit schemes Defined contribution schemes Personal Retirement
Savings Accounts (PRSAs) Retirement Annuity Contracts (RACs) or
Personal Pensions
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- Supplementary pension provision in Ireland (as at 31 December
2012) Defined benefit 572,681 members in 1,040 defined benefit
schemes - 933 schemes with 189,644 members are subject to the
Funding Standard - 107 schemes with 338,037 Public Service
employees (full and part-time) Defined contribution - 232,939
members in 60,192 schemes Personal Retirement Savings Accounts
(PRSAs) 206,936 PRSAs with asset value of 3.46 billion Personal
Pension Plans/Retirement Annuity Contracts (RACs) (200,000 +
contracts Irish Insurance Federation)
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- Pensions Coverage in the Irish Workforce
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- Pensions information Enquiry service info@pensionsboard.ie/
01-6131900 Information booklets Pension checklists Pension
calculators Free Online Trustee Training, Guidance & FAQs,
E-mail alerts & Trustee supports
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- Why have a Pension? Life expectancy increasing 20 plus years in
retirement What kind of lifestyle do you want and how will you fund
it? Current State pension = 230.30 per week 8 out of 10 people say
- the State pension will not meet all their needs in retirement
Pension = Income in Retirement
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- Tax relief on personal contributions Highest age at any time
during the tax year Limit Under 30 15% 30-39 20% 40-49 25% 50-54
30% 55-59 35% 60 and over 40% For tax purposes limited to earnings
up to a maximum of 115,000 in any year. Maximum pension fund of 2.3
million.
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- Changing world we live in Living Longer More Contract Work More
mobility in careers Changing work patterns More Part Time Working
Single Parent Households Smaller FamiliesSeparation/Divorce
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- Changing Demographics
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- Pensions in the workplace The workplace is the optimum location
for pension provision, information and education A company benefits
from having: a reputation and respect as a good employer a
workforce that feels valued and important increased loyalty and
commitment from staff an enhanced staff recruitment, reward and
retention package A good pension is a valuable asset, dont leave
work without it
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- Employers Pension Obligations By law an employer must provide
ALL employees with some form of access to a pension, whether they
are in full-time, part-time, temporary, contract or casual
employment. All employers regardless of their size are obliged to
provide access to a Standard PRSA for excluded employees The Board
encourages employers to regard pensions as part of the recruit,
reward and retain approach to staff The Board also encourages all
employees to ask their employer about their pension rights
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- Registered Administrators (RAs) From 1 November 2008 trustees
of every scheme must appoint an RA to provide core administration
functions Core administration functions are: -preparation of annual
reports -preparation of benefit statements -maintenance of
sufficient and accurate member records to discharge above
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- National Pensions Policy The recommendations include :
increasing the State pension age to 66 in 2014, 67 in 2021, 68 in
2028 introducing auto-enrolment new model defined benefit pension
scheme new model scheme for public servants
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- The Boards approach to Regulation The Boards allocation of
resources is risk oriented on the basis of the following
priorities: 1 st priority misappropriation of pension assets or
contributions 2 nd priority failure to pay benefits due 3 rd
priority inadequate funding of defined benefits 4 th priority
inappropriate investment 5 th priority failure to provide
prescribed information to members This order represents the
seriousness of the risks, not the likelihood of their occurrence.
Because regulation depends on Board access to reliable information,
we will especially target failure to provide the Board with
information required under the Pensions Act, including
whistleblowing obligations.
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- Regulation, Supervision and Enforcement On the spot fines
regime introduced in September 2007 - fine for each offence = 2,000
Compulsory trustees training introduced in February 2010 Registered
Administrators introduced in November 2008
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- Sanctions for non-compliance Board prosecutions: The Pensions
Board may take prosecutions against persons who breach provisions
of the Act or Regulations made there-under: Offences can be
prosecuted by the Board on summary basis (District Court) or by DPP
on indictment (Circuit Court) On summary conviction- a fine not
exceeding 5,000 or imprisonment for term not exceeding 1 year or
both On conviction or indictment by DPP- a fine not exceeding
25,000 or imprisonment for term not exceeding 2 years or both (or
in the case of a prosecution under Section 58(a) a fine not
exceeding 25,000 or imprisonment for term not exceeding 5 years or
both)
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- Trustee Challenges AdministrationInvestmentRegulationCosts
Communication
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- Main duties of Trustees under the Act register the scheme with
The Pensions Board ensure contributions are deducted and paid over
to the scheme invest the funds and pay the benefitsensure that the
funding standard is metkeep records and accountspreserve or
transfer benefitsensure equal pensions treatmentapply the resources
of the scheme on wind updisclose information as required
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- Risk Management for Trustees Where trustees do not have the
knowledge themselves, they engage professionals most often covering
administration, investment and communications. It is the trustees
job to: question the professionals to push back, and not to accept
answers that they dont understand or do not feel to be right. The
trustees must recognise that it is their responsibility to make
decisions, and their options should be set out for them clearly by
the professional advisers. This is probably the most challenging
aspect of being a trustee. It is important that trustees identify
the decisions that they are making, and that they have set out the
alternatives among which they are deciding.
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- Risk Management Strategy Unless trustees have a strategy for
dealing with risks, they are not managing their scheme properly.
There is no single or simple answer - trustees must identify the
best answers for their own scheme. Hoping it wont happen or hoping
that something will turn up is not a risk management strategy. As a
trustee do you know the costs? How optimistic are the calculations?
How much might they vary? Are you depending on high equity returns?
What happens if you dont get them? In the long run, trustees will
do themselves and all others concerned with the scheme most good if
they look at scheme funding from all angles.
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- Supporting Trustees The Board supports trustees in the
following ways: the Trustee Handbook an extensive range of guidance
and FAQs on pension matters generally booklets and checklists for
trustees the Board provides an information and enquiry service a
register of trustee training providers is available on the Boards
website the Board has developed an e-learning facility for trustees
which is free of charge and can be accessed on the Boards
website
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- Pension Adjustment Orders (PAOs) A PAO designates part of the
pension benefits to a non member spouse or person representing a
dependent child. The Civil Partnership and Certain Rights and
Obligations of Cohabitants Act 2010 (the Act) came into force on 1
January 2011 For further information, see - A brief guide to the
provisions of the Family Law Acts booklet
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- and to finish.. Thank you for your time and attention. I hope
you found my presentation interesting and of some benefit.
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- Questions & Answers