Earlier this year, the European Commission published a proposal for an updated IORP Directive. The original IORP was published in 2003 and transposed into Irish law in September 2005. In summary, the current proposals aim to give greater protection of the pension rights of scheme members and beneficiaries.
Following this, the Department of Social Protection issued a consultation on the IORP II Directive to ensure that the views of Irish stakeholders are considered and understood. For more information on the consultation, please see: www.welfare.ie/en/Pages/DSP-Consultation-and-Invitation-for-Submissions---EU-IORP-II-Directive.aspx
The two main areas in which the proposal would lead to significant change are:
The Society welcomes the increased emphasis on risk management for IORPs and the introduction in Article 28 (for DB schemes) of a formal actuarial function within the governance structure. We also welcome the proposed enhanced governance structure. However, we urge the Department to ensure that a proportionate approach is taken for smaller schemes, and not just to retain the existing de minimis exemption for schemes with fewer than 100 members.
Information to members
The Society is also in favour of the increased emphasis on disclosure in the draft Directive. In our view, the importance of effective member communication and engagement cannot be overstated, especially for DC Schemes. However, rather than introduce a harmonised Pensions Benefit Statement, we recommend that the detail of benefit statements be left to member states, so that they can fit in with national social and labour law, social security, tax and culture.
The Society’s response is available here : SAI Response to Department of Social Protection Consultation on IORPS II Directive
The proposed Directive will now be considered by the European Parliament and Council of the EU. It may be amended as a result of Member State/EU discussions. As an EU Directive, it will be implemented into Irish domestic law.