DARRAGH O'BRIEN TD
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Parliamentary Questions

IORP II regulation

19/2/2019

 
QUESTION

To ask the Minister for Employment Affairs and Social Protection if a cost-benefit analysis of the impact that the proposed IORP II regulation would have on operation of pension schemes with less than 100 members in particular its application to one person pension schemes has been carried out; and if she will make a statement on the matter.

To ask the Minister for Employment Affairs and Social Protection the consultation she plans to undertake with relevant stakeholders in respect of the regulation required to give effect to the transposition of IORP II into law; and if she will make a statement on the matter.


REPLY

The Government's Roadmap for Pensions Reform 2018 -2023 launched in February 2018 detailed specific measures that will modernise our pension system.  It includes plans for reform and simplification of occupational and private pensions.  Transposition of the Directive is a key part of the Government’s Roadmap.        

Transposition of the IORP II Directive will support positive reform of the Irish funded occupational pension sector.  Transposition will raise governance standards, improve trustee qualification and suitability, and increase supervision through enhanced powers for the Pensions Authority.   

In 2014, the  Department undertook an open public consultation on the IORP II Directive.  Further to that, the Pensions Authority undertook a consultation process on the reform and simplification of supplementary funded private pensions in 2016.  In addition, officials of my Department have engaged on the provisions of the Directive with numerous representatives and stakeholders over a number of years.  

My Department, supported by the Pensions Authority, conducted detailed analysis  on the implementation of the Directive.  

While the Directive provides for the possibility of derogation from specific Articles for smaller schemes, I believe that members of smaller schemes should get the same protections and oversight as members of large schemes.  Money saved for pension purposes should be properly protected to ensure that people have adequate income for their retirement years.  It should be noted that Member States must apply certain provisions concerning investment rules and the system of governance to schemes which have more than 15 members. 

The Pension Authority advises that there are 100,000 single member schemes and that 98% of these schemes are already compliant with the investment rules of the IORP II Directive.  Those not compliant will not be obliged to change existing investments and borrowings.  

Article 19 of the Directive sets out the investment rules for occupational pension schemes.  The underlying principle for capital investment is for schemes to invest in accordance with the 'prudent person' rule and the other specific rules set out in the Article.  It is recognised that there should be an appropriate level of investment freedom for schemes within prudent limits and this is reflected in the rules.  Assets must be predominantly invested on regulated markets, i.e., at least 50%.  This allows adequate scope for investment in instruments with a long-term economic profile and non-listed undertakings such as property and infrastructure.

The value of investments held in many schemes fell substantially during the financial crisis.  This emphasised the need for stricter regulation and greater protections, especially for small schemes investing in riskier unregulated markets.  Concerns in relation to this sector are particularly around the protection of the consumer and the money they have invested, the riskiness of investments, the charges that apply, and the standard of governance.  Accordingly, the Government has decided that the provisions of the Directive should apply to all funded occupational pension schemes.

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Darragh O'Brien TD


Address

Darragh O'Brien TD
Leinster House
Kildare Street
Dublin 2

Telephone

T:  01-6183802

Email

At present, and as a result of the COVID-19 pandemic, I am not holding my regular meetings across our towns and villages in North County Dublin. However, both I and my office are happy to speak to you and assist you with any issues you may have.

For all housing, planning or heritage related queries please don’t hesitate to contact:
Email: minister@housing.gov.ie
Phone: 01-8882000
Postal address: Department of Housing, Local Government and Heritage, Custom House, Dublin 1, D01 W6X0
 
For all constituency related queries please don’t hesitate to contact:
Email: Darragh.obrien@oireachtas.ie
Phone: 01-6183802
Postal address: Dáil Éireann, Leinster House, Kildare Street, Dublin 2.
 



  • HOME
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