Sixty-eight per cent of Irish DC schemes intend to wind up and transfer to an alternative pension arrangement, the country’s Pensions Authority has revealed.

The Pensions Authority has published its voluntary and anonymous Scheme survey 2023 findings report, which was issued in July 2023 to the trustees of 150 DB schemes and 150 DC schemes. Despite a majority of DC schemes planning to wind up, just 6 per cent of DB schemes surveyed intend to wind up.

Of the DC respondents who stated that they intend to wind up their scheme, 91 per cent of these schemes have assets of less than €10m. Seventy per cent of the schemes planning to wind up have 50 members or less. Some of the respondents who are continuing with their schemes stated that they may transfer to an alternative pension arrangement at a later date, once other scheme-specific issues have been resolved.

Most of the DB respondents intending to wind up their scheme had scheme assets less than €50m, with the majority having scheme assets less than €10m. There was one large scheme with assets greater than €500m intending to wind up. DC responses
In addition, the Pensions Authority said there was a “notably lower response rate” among DC scheme trustees surveyed and, in addition, many DC respondents chose not to answer several questions.

“This may indicate a level of non-compliance or a lack of adequate understanding by DC trustees of their risk-related obligations. The authority will monitor this position closely through its supervisory activities,” the authority stated.

The survey also covered schemes’ Own Risk Assessments (ORA); the Pensions Authority has set a deadline of 22 April 2024 for schemes to complete their initial ORA. Eighty-three per cent of DB schemes said the ORA had not been approved by their trustee board. However, many of these said that work is underway and would be completed by the deadline.

In regard to DC schemes, 72 per cent chose not to respond to the question on whether the ORA has been approved by their trustee board. A further 23 per cent said it had not been approved and 5 per cent said it had been approved.

“The authority reminds trustees that the ORA requirement should be prioritised to ensure the impending deadline is met," it stated.

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