Significant progress has been made by Irish pension scheme trustees in their preparations for complying with the IORP II Directive, although there is still “work to be done” by trustees to ensure compliance ahead of the 1 January deadline, the Irish Pensions Authority has said.

In its survey of defined benefit (DB) and defined contribution (DC) pension trustees, which aimed to assess the progress of schemes meeting the requirements of the updated Pensions Act 1990, 17 per cent of DC schemes did not expect to be fully compliant by 1 January, compared to 9 per cent of DB schemes.

The most common reason that schemes expected not to be fully compliant by 1 January 2023 was because they were planning on moving to a master trust, while a lack of a trustee qualification was the second most common reason.

The authority noted that most (89 per cent) DB schemes intend to continue their scheme, while almost half (46 per cent) of DC schemes intend to wind up and move to a master trust.

The survey, which excluded master trusts, found that 73 per cent of DC schemes had €10m or less in assets, compared to 13 per cent of DB schemes.

Almost half (49 per cent) of DC schemes had 50 or less members, compared to 17 per cent of DB schemes.

More than a quarter (26 per cent) of DB schemes had over 1,000 members, compared to 5 per cent of DC schemes, and 12 per cent of DB schemes had more than €1bn in assets, while no DC schemes had over €1bn in assets.

When asked whether the trustee board had conducted a review of the impact of IORP requirements on the future of the scheme, 12 per cent of DC schemes said they had not, compared to 3 per cent of DB schemes.

Of the 13 DC schemes that said they had not completed a review, one said they would complete one by 30 June 2022, 11 said it would be done by 20 September 2022, and one had no date planned.

One of the four DB schemes that responded they had not completed a review said they would by 30 September 2022, while three had no date planned.

One in 10 (10 per cent) of DC schemes had not consulted with the employer on the future of the team, with two of the 10 stating they had no date planned, while 4 per cent of DB schemes had not consulted the employer, with five of the six having no date set.

More than half (57 per cent) of DC schemes had not selected a risk manager, although most were either winding up or moving to a master trust, and 35 per cent of DB schemes were yet to appoint a risk manager.

However, all schemes said they were in the process of appointing a risk manager, if they were not winding up or moving to a master trust.

Furthermore, while all schemes said they were in the process of appointing an internal audit manager, 61 per cent of DC and 66 per cent of DB schemes were yet to do so.

Looking at the policies trustee boards have in place, most had remuneration policies in place and the majority of DB schemes had a conflicts of interest policy.

However, for all the other policies mentioned in the survey, less than half of DC and DB schemes had them in place.

More than one in 10 (11 per cent) of DC schemes had none of the policies mentioned in place, although all were either moving to a master trust or unsure on the future of the scheme, while 7 per cent of DB schemes had none of the policies in place, with more than half of those advising that they were continuing the scheme.

On whether the trustee board met the appropriate qualifications, knowledge and experience requirements, 9 per cent of DC scheme board members did not, compared to 37 per cent of DB scheme board members.

In its conclusion, the authority stated: “The survey findings indicate that while significant progress has been made by scheme trustees to meet the requirements of the act, there is still work to be done by trustees to ensure compliance ahead of the 1 January 2023 deadline.

“The survey findings also indicate that most DB scheme trustees surveyed intend to continue their scheme, while almost half of the DC trustee respondents noted an intention to wind up their scheme and move to a master trust.”

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