The Irish Pensions Authority found instances of non-compliance with enhanced governance standards in the majority of Irish pension schemes in its engagement and audit activity in 2022.

In its Engagement and Audit Findings Report for 2022, the authority noted that while most schemes appeared to be taking steps to address the enhanced governance standards introduced in 2021, the pace of change was “slow and needs to be accelerated”.

Noting that it found issues of non-compliance in most schemes it looked at in 2022, the authority said this trend was “concerning”.

Summarising, the authority said its findings indicated that progress has been slow in certain areas given the heightened standards of the IORP II requirements and the deadline for full compliance of group schemes of 1 January 2023.

The authority added that it expects trustees to implement the changes necessary to bring their schemes into compliance as a matter of priority.

There was scope for improvement in several governance areas, the authority noted, including trustee board structure, the adoption of scheme—specific policies, embedding key function holders (KFH), and interrogating outsourcing and investment arrangements.

Furthermore, compliance of new one-member arrangements (OMA) and small self-administered schemes (SSAS) with the authority’s Code of Practice for trustees and the amended Pensions Act, 1990, will continue to be monitored.

“The authority expects all trustees and their advisers to carefully consider these findings and use them as a basis for evaluating their own practices and making improvements where necessary,” it stated.

It found that few trustee boards had reviewed their composition for improved diversity of skills, knowledge and experience, and there was often reliance on one individual who was considered to have superior knowledge.

Progress on the appointment of KFHs was found to be slow, with many boards still in the process of shortlisting candidates, with the deadline for having KFH appointments in place coming up on 1 January 2023.

There was also a lack of review by trustees of outsourced providers, and there was evidence of the adoption of template scheme policies proposed by advisers without sufficient consideration.

The authority added that it had not seen enough evidence of trustees reviewing investment information, and evaluating fund performance, fund managers and their investment advisers.

Following the compliance deadline of 1 July 2022, the authority conducted a series of inspections of OMAs established after 21 April 2021.

It found that the majority of trustees did not meet the fitness and probity requirements and, in most cases, could not provide an annual compliance statement (ACS).

However, in almost all instances, the trustees were intending to wind up the OMA involved.

Finally, the authority found that most schemes were complying with preparing their ACS, although there was an “evident lack of understanding” of the ACS requirements and process amongst trustees of smaller schemes.

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