Disclosure

Information Overview I

Under employment legislation, details of the pension scheme must be included in the information which must be given to employees within 30 days of commencement of employment.

On joining the scheme, members should be given a booklet summarising its terms.  Persons entitled, include members, prospective members, spouses of members, persons potentially qualifying for benefits and authorised trade union representatives.

It is a condition of Revenue approval that the employer furnishes certain information to scheme members. The Revenue requirements will effectively be satisfied by an announcement letter.


Information Overview II

A beneficiary is generally entitled to see the relevant trust documents and to be furnished with information relating to his interest under a trust.  There are specific disclosure obligations in addition to the general legal obligations of the trustees to the trust beneficiaries as such, to information in relation to the pension trust.  The requirements of the Revenue and under the disclosure regulations are likely to satisfy the trustee’s obligations of disclosure in equity.

The disclosure regulations requirements are much more detailed and prescriptive than trust law. The rights can be asserted much more easily. Members of an occupational scheme are entitled to information in relation to its terms.  Trustees must provide specific information at certain points in time, including upon a member joining a scheme, leaving a scheme, dying, or when the scheme is terminated.

Trustees must cause audited accounts, reports, actuarial valuations and annual reports to be prepared and made available to members on a regular basis. The accounts must be audited and published to members. The assets of the scheme must be valued by the scheme actuary at certain intervals.


New Members Disclosure

Certain information must be furnished to new members within two months of becoming a member. There is no obligation to notify spouses. In the case of divorce and judicial separation, spouses and other specified persons have the right to certain information in relation to the scheme.  Material alterations must be notified within 30 days. The required information includes

  • categories of person entitled to be members;
  • categories of persons required to be members;
  • conditions of membership;
  • how members’ contributions are calculated;
  • how employer’’ contributions are calculated;
  • whether the scheme is Revenue approved;
  • benefits payable and the methods of calculation
  • the conditions applicable;
  • which benefits are discretionary;
  • which benefits are funded;
  • which benefits are insured;
  • the extent of any employer guarantee;
  • details as to whom inquiry should be made;
  • details of persons entitled to amend the scheme;
  • arrangement for AVCs;
  • pension adjustment order information;
  • statement of registration with Pension Board;
  • certain other information.

Trustees’ Annual Reports

The trustees may prepare an annual report for each scheme.  There are exemptions for schemes providing death in service benefits only, certain small schemes (with no long service benefits, or only those accrued before 1997) and for single member arrangements. Other small schemes may prepare abbreviated annual reports.

The annual report must contain prescribed information including

  • audited accounts;
  • auditors’ report;
  • actuarial funding certificate;
  • where applicable, funding proposals;
  • a copy of the valuation report for a defined contribution scheme;
  • details of trustees;
  • details of the auditor, solicitor, bank, custodian, administrator, name and address of persons dealing with enquiries,
  • change in certain basic information;
  • number of members in service,
  • number of members in receipt of benefit, the number of deferred members;
  • statement as to whether or not increases were made to pensions during the year and by what percentage;
  • review of the financial development of the scheme;
  • name and details of persons concerned in the management of the investments where delegated,
  • whether the scheme bears the cost of an investment manager and if so, its remuneration particulars;
  • an investment report, with investment policies and a review of investment performance;
  • a statement of the right to select member trustees;
  • a statement re trustee training;
  • a statement of significant post year-end items;
  • a statement whether trustees have access to training;
  • a statement that the scheme has been registered with the Pension Board;
  • a statement as to whether the trustees have access to the trustee handbook and guidance note by Pensions Board;
  • a statement regarding procedures to ensure contributions are received;
  • a statement regarding internal dispute resolution procedures that applies before the reference to the Pension Ombudsman;

The trustees, the employer, actuary and auditor are obliged to disclose and furnish the requisite information necessary for the carrying out of the reports, audits, valuations, et cetera.  The employer, actuary, or auditor are entitled to request information of the trustees, necessary to carry on their functions.


Accounts and Auditor’s Report

Trustees must cause to be prepared audited accounts and an auditors’ report. The obligation to prepare accounts does not apply to a scheme that

  • provides death in service benefits only;
  • is not a funded scheme;
  • is a small scheme without long service benefits or with pre-1997 accrued benefits only;
  • is a small scheme in winding up;
  • certain other small schemes;
  • one-member arrangements.

The audited accounts must provide information that gives

  • a true and fair account of the transactions for the relevant year
  • assets and liabilities of the scheme at the year-end date;
  • comparative figures for the previous year;
  • statements that the accounts conform with the requisite pension financial reporting standards.

The auditor’s report must deal with certain matters including in particular whether the account auditors are of the opinion that the accounts give a true and fair view of the financial transactions of the scheme for the relevant period and of its assets and liabilities at the relevant year end. It must confirm whether contributions have been received within 30 days of the year end and paid in accordance with the rules. It must set out any recommendation of the actuary and the reasons for any qualifications to the report. The assets of the scheme must be valued by the scheme actuary at certain intervals.


Funding / Valuation

Certain schemes must have their assets actuarially valued at regular intervals. A report is to be made on the valuation.  The actuary must report on the valuation. The obligation does not apply to certain schemes including small schemes, death in service only and non-funded schemes.

Most trustees must prepare an actuarial funding certificate, confirming the solvency of the scheme.  This is to be included in the annual report.  For defined benefit schemes, the valuation report must be made available to members and certain others within nine months of the reporting date. The report is also to be made available for inspection, free of charge, to those persons.

In the case of defined contribution schemes, the liabilities are valued on the last day of the scheme year. A valuation report is to be prepared as soon as reasonably practicable.

Certain schemes are exempted from the obligation to prepare valuations and reports. The exemptions are similar, but not identical to the exemptions for the provision of accounts.

Where a funding certificate is prepared for a defined benefit scheme, the annual report must contain a statement by the actuary on the funding position.  The actuary must state whether he is reasonably satisfied that if he was to prepare a funding certificate for the last day of the period concerned, he would certify that the scheme satisfies the statutory funding standard under the Pensions Act.

If the requisite statement cannot be provided, the trustees must notify the Pension Board. They must prepare a certificate which so certifies, within 12 months.  Certificates must be provided annually until effective proposals are implemented to secure the funding standard is met.  The scheme must, therefore, report annually on funding instead of tri-annually.


Individual Disclosure

The contents of the trust deed, rules, and other documents must be made available for inspection.  Where there are different rules for different members, they need not be disclosed unless they are relevant.

Beneficiaries are entitled to individual information relevant to their own circumstances.  This will usually be in the form of a benefit statement.  An annual benefit statement should be given in writing.  It should be accompanied by a statement indicating that further information is available on request and give details of the person to whom enquiries should be made.

Trustees are obliged to disclose information to individual members and others in certain circumstances. This includes information on

  • the constitution of the scheme;
  • its administration and finances, including commissions;
  • that person’s individual benefits, entitlements and
  • such other matters as may be prescribed.

The obligations apply on certain events or on request.  The information must be made available for inspection free of charge.


Requested Information

Regulations made under the Pensions Act oblige trustees to give information to members automatically and on request. Members and other persons entitled may make a request for information within 12 months of the last occasion on which he received the same document.

Copies of earlier accounts, reports and valuations must be furnished on request unless the request is made within three years of when the same document was given. Where information is made available for inspection, it must be at a convenient place.

No charge can be made for making documents available.   A reasonable charge may be made for making copies. The failure to furnish the requisite information is a criminal offence. Employers must give information to trustees as may be required by them to carry out their obligations under the legislation.


DB Annual Disclosure

In defined benefit schemes, the following must be disclosed at least once in every year:

  • the amount of members benefits and survivors’ benefits payable from normal pension age or death; (calculations may be made without regard to possible salary increases, with or without regard to allowances or emoluments; the method of calculation must be stated);
  • the amount of members benefits and survivor’s benefit payable from the normal pension age if service was to terminate immediately; the method of calculation;
  • the amount of benefits secured by AVC;
  • statement re social welfare pension qualification, if payable in addition;
  • members’ date of entry
  • normal pensionable age;
  • the amount of contributions paid by the member;
  • the amount of pensionable salary;
  • the amount of survivors’ benefit payable on death prior to pensionable age, without regard to possible salary increases;
  • whether there is an option to purchase further benefits;
  • whether a pension adjustment order has been made;
  • the member’s name, birth, gender;
  • the name of scheme trustees;
  • a statement that method of calculation of contributions payable in respect of the member is set out in scheme rules and explanatory booklet,
  • a statement that a member who is concerned that contributions have not been paid should contact the nominated person, and then if necessary, the trustee and employer and ultimately the Pensions Board
  • a statement that the information in the benefit statement is issued on behalf of the trustees.

DC Annual Disclosure

In the case of a defined contribution scheme, the following annual disclosure is required:

  • date of entry into membership of scheme;
  • normal pensionable age;
  • the amount of contributions, including AVCs;
  • accumulated value of the contributions at the date;
  • statement of whether or not the value is guaranteed, and if not guaranteed, that the amount available at normal pension age could be lower or higher; the accumulated value must be stated to be on the express assumption that the member remains in service to normal pensionable age;
  • the amount that would be available for transfer out of the scheme on the assumption that the member’s employment terminated;
  • statements regarding the social welfare pension;
  • statements of death in service benefits;
  • whether other additional benefits may be acquired by AVC
  • name of scheme trustees
  • member’s particulars
  • whether there is a pension adjustment order;
  • a statement specifying each contribution paid or credited between the current and previous date;
  • a statement of the gross and net amounts invested by the trustee on behalf of the members (and explanations for the difference);
  • that a statement of the method of calculation of contributions for the member is set out in the rules or explanatory booklet
  • that a statement that members who are concerned that contributions have not been paid should contact a nominated person, then trustees, employer, and if necessary the Pensions Board;
  • a statement that information is issued on behalf of the trustees

Statement of Reasonable Projection

A statement of reasonable projection must be furnished. This should specify,

  • the level of benefits reasonably expected at a specified date based on contributions and transfers paid credited or received by the scheme;
  • the benefits that reasonably could be expected at the relevant date under the scheme, based on contributions and transfers paid, credited and received by or on behalf of the member to the scheme;
  • the material assumptions;
  • a statement advising the member of the importance of making retirement provision.

A statement of reasonable projection for a defined contribution scheme and on the defined contribution element of a defined benefit scheme must be furnished;

  • to each member within two months of becoming a member or a transfer being received into the scheme,
  • not later than four weeks after request; and
  • not less than four weeks after a variation.

Termination I

The trustees must notify a member whose service ceases to count towards pension accrual (whether or not employment terminates) within four weeks. This may arise  where the pension scheme ceases, or the member ceases to qualify.

Certain statements must be given as soon as practicable, but within six months as to whether any part of the scheme will be applied in making a payment out to another scheme or an insurance policy.  If any monies remain in the scheme, then an annual benefit statement must be furnished to the member. Disclosures must also be made in relation to receipts from another scheme of the same employer or where the other scheme ceases to apply.

The trustees are obliged to give certain information to employees as soon as possible on termination of employment.  There are different requirements for defined benefit and defined contribution scheme.  Where there is no preserved benefit, an explanation of the member’s rights and options must be given on termination of employment including details of any refund of contributions.


Termination II

Where there is a preserved benefit, information must be given on certain matters including

  • rights and options available on termination;
  • the date on which benefits become payable;
  • options to have alternative benefits payable immediately;
  • whether a refund of contributions is or might be available,
  • particulars of the scheme trustee and persons making payment;
  • amounts available for transfer out;
  • the procedure for claiming benefits in the event of termination of the scheme for that member pre-retirement;
  • details of transfers made;
  • details of pension adjustment order.

Members of a defined benefit scheme whose employment is not terminated, but for whom pensionable employment ceases, are entitled to the above information on request. There are broadly similar, but differing obligations in respect of members of a defined contribution scheme.


Preserved Benefits

Where there are no preserved benefits, an explanation of its absence must be given, and further information must be given on request.

Where there are preserved benefits, much the same information as above must be furnished including

  • rights and options available to the member;
  • details of accumulated value of contributions
  • options to have benefits payable immediately if applicable;
  • whether a refund of contributions available;
  • details of the scheme trustees and persons paying benefits;
  • the amount available for transfer out and procedures applicable;
  • procedures for claiming benefits in the event of termination of employment prior to pensionable age;
  • statement of reasonable projection specifying the level of benefits, which could reasonably be expected to a specified day would be payable under the scheme based on contributions received by the scheme.

Information on Death / Retirement

Certain information is required on retirement or death. This includes

  • the amount of benefit and options thereby arising
  • the method of calculation;
  • the conditions subject to which payments will be made;
  • any rules of the scheme whereby the amount payable may be altered;
  • an explanation of the options available to take a lower pension or lower initial pension with increases payable annually.

Winding Up

Where decision is made to wind up a scheme, notice and information must be given to

  • the Pensions Board;
  • scheme members;
  • members with deferred benefits;
  •  members in receipt of benefits and
  • to authorised trade union representative.

It must be given within 12 weeks. The persons entitled must be given information relating to the rights and benefits available to them and their entitlements.

As soon as practicable after the scheme assets have been applied each active and deferred member must be furnished with

  • certain specified information as it relates to him;
  • an explanation of the manner in which any surplus is dealt with;
  • information as to who is liable to pay the benefits after the scheme is wound up.

After the scheme has been wound up, each pensioner and beneficiary must be furnished with similar information.


Small Schemes Winding Up

The full extent of the disclosure regulations is modified for “small” schemes which are being wound up. A report is to be provided to the Pensions Board as soon as possible, but in any event, within three months and annually thereafter, during winding up. The report must contain

  • the date of winding up event;
  • an estimate of the realisable value of scheme assets;
  • an estimate of liabilities;
  • a statement of realisations and disbursements;
  • a summary report on the progress of the winding up
  • the time line to dissolution;
  • other information as Pensions Board require.

Directed Investments

Where the scheme trustees are authorised to invest its resources in accordance with members’ directions, certain information must be made available on request to the members.  This information includes

  • investments made, and investment alternatives available;
  • statement of the default investment strategy;
  • the identity of the investment manager;
  • description of nature of investment alternatives including risks v returns and diversification;
  • terms and conditions applicable;
  • charges levied on investment alternatives;
  • contact details for enquiries;
  • that the trustees are not responsible for poor investment returns if this is the case;
  • information on investment portfolios, risks and costs.

The information must be provided as soon as possible and in any event within three months.


Small Schemes

Reduced disclosure obligations apply in respect of small schemes.  Small schemes are those with under 100 members who are entitled to but are not receiving any immediate retirement benefits under the scheme.  Where the exemption applies, the trustees may instead of preparing audited accounts and an annual report arrange for an alternative annual report to be prepared for each year.

The alternative report may be prepared by a person qualified as an auditor. Where some or all of the benefits are secured by a single insurance undertaking, it may be prepared by a person designated by the insurer for that purpose. Where there is more than one insurer, it may be prepared by designated person, who must obtain statements of relevant benefit from other insurers.

The alternative annual report statement must be prepared as soon as reasonably possible after each year end.  It must contain

  • statement of contributions received
  • a statement by the person preparing the report that based on reasonable enquiries and information to hand, that the contributions payable during the year have been received and paid in accordance with the rules
  • appropriate recommendations of the actuary; and if qualified, the reasons;
  • a statement of the manner of investment of the scheme including the extent of any self / related party investment;
  • statement to the effect that the scheme has not been audited;
  • statement of material transactions;
  • A copy of the latest actuarial funding certificate if applicable;
  • an investment report providing a summary of investments, investment policies, and performance,
  • a statement whether the scheme is a defined benefit or defined contributions scheme.

Disclosure Offences

Any trustee, employer, PRSA provider, actuary or auditor who contravenes its obligations under the Disclosure Regulations is guilty of an offence and may on summary conviction be liable to a fine up to €1,904 (see Fine Act) or up to one year’s imprisonment or on conviction on indictment up to  two years’ imprisonment and a fine up to € 12,697.

Where a company commits the offence, then if it is proved that it was committed with the consent or connivance of a director, manager, secretary or other officer, that person shall be guilty of an offence.  Certain defences are available.


Notes to Accounts

There are obligations to make disclosures in relation to pensions in the notes to a company’s accounts.  Particulars must be given of pension commitments. The accounts must give information as to the nature of every pension scheme operated by the company including

  • its nature;
  • whether it is externally or internally funded;
  • whether costs and liabilities are assessed in accordance with the advice of a professionally qualified actuary;
  • the most recent actuarial date;
  • whether the actuarial valuation is available for inspection.

Accounting standards provided or fair value of pension costs and obligations. Financial Reporting Standards FRS and IAS19 apply to the corporate employer.


Trust Retirement Annuity Contracts

While most retirement  annuity contracts are set up under individual contracts with an insurer and are governed by the Life Directives, trust RACs come under the remit of the Directive on the activities and supervision of Institutions for Occupational Retirement Provision (known as the IORPs Directive).

In order to comply fully with the provisions of the IORPs Directive, it was therefore necessary to bring such trust RACs under the remit of certain provisions of the Pensions Act including  in relation to the Disclosure of Information. Small trust RACs (i.e. a trust RAC which has less than 100 members) are exempted from disclosure of information requirements.


References and Sources

Irish Books

Irish Pensions Law & Practice Buggy, Finucane & Tighe 2nd Ed (2005) Ch. 13

Pensions; Revenue Law and Practice (ITI) Dolan, Murray, Reynolds, McLoughlin (2013)

Trustee Handbook the Pensions Authority 5th Ed 2016

Statutory Guidance the Pensions Authority (Various)

Website

www.pensionsauthority.ie

UK Books

Pensions Law Handbook 12 Ed Nabarro Nathanson Bloomsbury

Corporate Insolvency 6e: Employment & Pension Rights (6th Revised edition)

Occupational Pensions (Subscription) Lexis Nexis

Pensions Law and Practice with Precedents (Subscription)    Sweet & Maxwell

Sweet & Maxwell’s Law of Pension Schemes (Subscription)

The Guide for Pension Trustees World Economics Ltd

The Guide for Pension Trustees website, you can:

Tolley’s Pensions Law Looseleaf Service (Subscription)

Statutes

Pensions Act, 1990

Pensions (Amendment) Act, 1996

Pensions (Amendment) Act, 2002

Pensions (Amendment) Act, 2006

Social Welfare and Pensions Act, 2005 (Part 3)

Social Welfare Reform and Pensions Act 2006

Social Welfare and Pensions Act 2007

Social Welfare and Pensions Act 2008

Social Welfare (Miscellaneous Provisions) Act 2008

Social Welfare and Pensions Act 2009

Social Welfare and Pensions (No. 2) Act 2009

Social Welfare (Miscellaneous Provisions) Act 2010

Social Welfare and Pensions Act 2010

Social Welfare and Pensions Act 2011

Social Welfare and Pensions Act 2012

Social Welfare and Pensions (Miscellaneous Provisions) Act 2013

Social Welfare and Pensions Act 2013

Social Welfare and Pensions (No. 2) Act 2013 49/2013

Social Welfare and Pensions Act 2014

Social Welfare and Pensions (No. 2) Act 2014 41/2014

Social Welfare (Miscellaneous Provisions) Act 2015 12/2015

Social Welfare and Pensions Act 2015 (Part 3)