There is "considerable work" to be done to ensure that pension members reap the benefits of the IORP II requirements, Irish pensions regulator, Brendan Kennedy, has said, admitting that "it is unlikely that regulations of pensions will become simpler than it is now". 

Commenting in a statement on the Irish Pension Authority's Annual Report and Accounts, Kennedy explained that although the European Commission is committed to simplifying financial services regulation, it is unlikely that pension regulation will become simpler than it is now.

This sentiment was echoed by Pensions Authority chair, David Begg, who explained that the recent developments in Irish pensions have been mostly as a result of the implementation of EU regulations and directives.

"Increasingly such European developments are applied to all financial institutions and are not specific to the pensions sector: this reflects the view that those saving for retirement are entitled to no less protection and supervision than other savers," he stated.

However, Begg warned that the result of this increasingly complex environment is undoubtedly that pension management and administration require more time and professionalism, suggesting that "this trend will continue and be reflected in supervisory expectations".

In particular, Kennedy pointed out that, in the short and medium term, there will be further obligations imposed under the Digital Operational Resilience Act (DORA)and the European Single Access Point (ESAP)," he explained.

Kennedy said that there is also "considerable work" remaining to be done to ensure that pension scheme members reap the benefits of the requirements of IORP II, highlighting this as a key priority for the Authority over the next year.

Additionally, Kennedy confirmed that administrators will be expected to provide considerably more data to the authority, details of which will be published by the end of 2025.

"Pension scheme trustees must adapt to these increased (IORP II) requirements and ensure that they are familiar with and properly fulfilling their obligations," he stated.

"In particular, trustees must ensure that their administration systems are fit for purpose, secure and robust and that they provide comprehensive, accurate, and timely data as required.

"One of the Authority’s highest priorities in the coming months is to continue engagement with the pensions sector to facilitate the compliance of those single-member pension schemes whose derogation from the provisions of IORP II will expire in April 2026."

Begg also emphasised the need for this work, pointing out that there are tens of thousands of single-member pension schemes registered with the Authority whose derogation from the obligations of the IORP II Directive will expire in less than a year.

"It is unlikely that it will be economic for most of those schemes to put in place the required governance measures to become compliant, and therefore the most realistic option for such schemes is to transfer into a personal retirement savings account (PRSA) or a multi-employer master trust," he explained.

"Although good initial progress has been made in resolving these schemes, there is a considerable amount remaining to be done, and this is a concern for the Authority."

He also confirmed that, once the derogation expires in April 2026, the authority will have to consider whether enforcement actions are appropriate.  

However, the authority's Annual Report and Accounts welcomed the recent commitment by the Minister for Social Protection, Dara Calleary, to introducing pensions legislation later this year, confirming that it has been providing advice to the Department of Social Protection on these matters.

"We will particularly welcome the proposed authorisation regime for pension schemes, which will enhance the flexibility of pensions regulation," Kennedy said.

"It is also important that there should be consistency between the consumer protection for pension scheme savers and PRSA contributors, and the Authority is looking at a number of such issues."

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