Investment Duties
Occupational Pension Schemes (Investment) Regulations, 2006 Revoked
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S.I. No. 294 of 2006
OCCUPATIONAL PENSION SCHEMES (INVESTMENT) REGULATIONS, 2006
The Minister for Social and Family Affairs, in exercise of the powers conferred on him by section 5 (as amended by section 44 of the Social Welfare Law Reform and Pensions Act 2006 (No.5 of 2006)), 59(1) (as amended by section 33 of the Social Welfare and Pensions Act 2005 (No. 4 of 2005)), 59(1A) and (1C (inserted by section 33 of the Social Welfare and Pensions Act 2005 ) and section 61B (inserted by section 36 of the Social Welfare and Pensions Act 2005 )of the Pensions Act 1990 (No. 25 of 1990) hereby makes the following Regulations:
Citation
1.These Regulations may be cited as the Occupational Pension Schemes (Investment Regulations, 2006.
Definitions.
2. In these regulations –
“the Act” means the Pensions Act 1990 (No. 25 of 1990);
“collective investment undertaking” means –
(a) an investment undertaking within the meaning assigned to it in section 739B of the Taxes Consolidation Act, 1997,
(b) a unit trust which neither is, nor is deemed to be, an authorised unit trust scheme (within the meaning of the Unit Trust Act, 1990 (No. 37 of 1990)),
(c) an undertaking for collective investment in transferable securities (within the meaning assigned to it by Council Directive 85/611/EEC of 20 December 1985)1 situate in another Member State,
(d) a common contractual fund within the meaning of section 739I (1)(a)(i) of the Taxes Consolidation Act, 1997 (no.39 of 1997) (inserted by section 44 of the Finance Act 2005 ) (No.5 of 2005));
“insurance policy” means an insurance policy or contract of assurance issued by any person who is the holder of an authorisation –
(a) granted by the Minister for Enterprise, Trade and Employment under the European Communities (Life Assurance) Framework Regulations, 1994, ( S.I. No. 360 of 1994 ) or under the European Communities (Life Assurance) Regulations 1984 ( S.I. No. 57 of 1984 ) and still in force, or
(b) granted by the authority charged with the duty of supervising the activities of insurance undertakings in a Member State other than the State in accordance with Article 6 of Council Directive 79/267/EEC2 (as inserted by Article 3 of the Council Directive 92/96/EEC3 );
“one member arrangement” means a scheme which is established for one person only and that one person will always be the only member and that member has discretion as to how the resources of the scheme are invested, unless the scheme is made the subject of a Pension Adjustment Order, in which case it may also include the person or persons referred to in the Pension Adjustment Order;
“regulated market” means –
(a) transferable securities and money market instruments admitted to or dealt in on a regulated market within the meaning of Article 1(13) of Council Directive 93/22/EEC4 ,
(b) transferable securities and money market instruments dealt in on another regulated market in a Member State which operates regularly and is recognised and open to the public; or
(c) transferable securities and money market instruments admitted to official listing on a stock exchange in a non-Member State or dealt in on another regulated market in a non-Member State which operates regularly and is recognised and open to the public provided that the choice of stock exchange or market has been approved by the local competent authorities.
Revocation.
3. The Occupational Pension Schemes (Investment) Regulations 2005 ( S.I. No. 593 of 2005 ) are revoked.
Borrowing rules.
4. For the purposes of section 61B of the Act –
(a) the trustees of a scheme may borrow money but only for liquidity purposes and only on a temporary basis, and
(b) the trustees of a one member arrangement may borrow money.
Statement of investment policy principles.
5. The statement of investment policy principles required under section 59(1B) of the Act shall be in writing and shall include the following matters –
(a) the investment objectives of the trustees,
(b) the investment risk measurement methods,
(c) the risk management processes to be used, and
(d) the strategic asset allocation implemented with respect to the nature and duration of pension liabilities.
Investment rules.
6. (1) This Article applies to any scheme other than a one member arrangement.
(2) In providing for the proper investment of the resources of a scheme under section 59(1)(b) of the Act, trustees shall comply with the rules set out in this article.
(3) The assets of the scheme must be invested in a manner designed to ensure the security quality, liquidity and profitability of the portfolio as a whole so far as is appropriate having regard to the nature and duration of the expected liabilities of the scheme.
(4) The assets of the scheme must be invested predominantly on regulated markets; investment in assets which are not admitted to trading on a regulated market must in any event be kept to a prudent level.
(5) The assets of the scheme must be properly diversified in such a way as to avoid excessive reliance on any particular asset, issuer or group of undertakings and so as to avoid accumulations of risk in the portfolio as a whole. Investments in assets issued by the same issuer or by issuers belonging to the same group must not expose the scheme to excessive risk concentration.
(6) Investment in derivative instruments may be made only in so far as they –
(a) contribute to a reduction of investment risks, or
(b) facilitate efficient portfolio management,
and any such investment must be made so as to avoid excessive risk exposure to a single counterparty and to other derivative operations.
(7) For the purposes of this article –
(a) investment in a collective investment undertaking shall be treated as being invested on a regulated market in accordance with sub-article (4) and diversified in accordance with sub-article (5) to the extent that the investments held by that undertaking are themselves so invested,
(b) investment in an insurance policy falling within the class of insurance specified at paragraph III of Annex 1 of Council Directive 2002/835 shall be treated as invested on a regulated market in accordance with sub-article (4) and diversified in accordance with sub-article (5) to the extent that the selection by trustees of the investments by which the return on the insurance policy will be determined complies with those sub-articles,
(c) investment in an insurance policy the terms of which provide that the proceeds of the insurance policy at maturity will be equal to or greater than the amount of the investment over the term of the insurance policy, shall be treated as invested on a regulated market in accordance with sub-article (4) and diversified in accordance with sub-article (5),
(d) investment in an insurance policy of a type to which Article 2(1)(b) of Council Directive 2002/83 relates shall be treated as invested on a regulated market in accordance with sub-article (4) and diversified in accordance with sub-article (5), and
(e) investment in bonds issued by the Government of any Member State shall be treated as diversified in accordance with sub-article (5).
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GIVEN under the Official Seal of the Minister for Social and Family Affairs, this 24th day of May 2006.
SÉAMUS BRENNAN
Minister for Social and Family Affairs
EXPLANATORY NOTE
(This note is not part of the Instrument and does not purport to be a legal interpretation.)
These Regulations revoke and replace Regulation 593 of 2005.
Recent case law in Ireland has suggested that a provision of domestic legislation cannot be used for the purposes of implementing EC law unless it is clear that such delegated legislation is clearly authorised by the primary legislation.
To this end, section 5 of the Pensions Act 1990 was amended by section 44 of the Social Welfare Law Reform and Pensions Act, 2006 to expressly state that regulations made under the Pensions Act may be used to implement law.
Regulation 593 of 2005 was made under section 3 of the European Communities Act 1972 due to uncertainty with regard to using the powers under the Pensions Act. However, now that those powers have been clarified these regulations are now being re made under the Pensions Act powers.
1 O.J. L375, 31.12.1985, p.3
2 O.J. L63, 13.3.79, p.1
3 O.J. L360, 9.12.92, p.1
4 O.J. L141, 11.6.1993, p.27
5 O.J. L345, 19.12.2002, p.1
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S.I. No. 188 of 2007
OCCUPATIONAL PENSION SCHEMES (INVESTMENT) (AMENDMENT) REGULATIONS, 2007
Notice of the making of this Statutory Instrument was published in
“Iris Oifigiúil” of 4th May, 2007.
The Minister for Social and Family Affairs, in exercise of the powers conferred on him by sections 5, 59(1), 59(1A) (all as amended by section 37 of the Social Welfare and Pensions Act 2007 (No.8 of 2007)) and 59(1C) (inserted by section 33 of the Social Welfare and Pensions Act 2005 ) of the Pensions Act 1990 (No. 25 of 1990) hereby makes the following Regulations:
Citation and Construction.
1. (1) These Regulations may be cited as the Occupational Pension Schemes (Investment) (Amendment) Regulations, 2007.
(2) These Regulations and the Occupational Pension Schemes (Investment) Regulations 2006 ( S.I. No. 294 of 2006 ) shall be construed together as one and may be cited as the Occupational Pension Schemes (Investment) Regulations 2006 to 2007.
Commencement.
2. These Regulations come into operation on 27 April 2007.
Amendment to Regulations.
3. The Occupational Pension Schemes (Investment) Regulations 2006 ( S.I. No. 294 of 2006 ) are amended by inserting the following after article 6—
“ 7. The provisions of Article 6(4) apply in respect of that proportion of the assets of the scheme attributable to each individual member of the scheme, other than a one member arrangement, in the same manner as they apply to the assets of the scheme as a whole.”.
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GIVEN under my Official Seal,
25 April 2007
SÉAMUS BRENNAN
Minister for Social and Family Affairs
EXPLANATORY NOTE
(This note is not part of the Instrument and does not purport to be a legal interpretation.)
These Regulations amend the Occupational Pension Schemes (Investment) Regulations 2006 ( S.I. No. 294 of 2006 ) by clarifying that the investment rules in Article 6(4) of the 2006 Regulations apply on an individual member basis as well as a scheme basis, except for a one member arrangement. Assets attributable to individual scheme members must be predominantly invested in regulated markets as well as the assets of the scheme as a whole.
S.I. No. 643/2016 –
European Union (Occupational Pension Schemes Investment) (Amendment) Regulations 2016.
View SI Amendments Open PDF
Notice of the making of this Statutory Instrument was published in
“Iris Oifigiúil” of 3rd January, 2017.
I, LEO VARADKAR, Minister for Social Protection, in exercise of the powers conferred on me by section 3 of the European Communities Act 1972 (No. 27 of 1972), and for the purpose of giving further effect to Directive 2003/41/EC of the European Parliament and of the Council of 3 June 20031 and Article 18 of that Directive (as amended by Article 1 of Directive 2013/14/EU of the European Parliament and of the Council of 21 May 20132 ), hereby make the following regulations:
1. These Regulations may be cited as the European Union (Occupational Pension Schemes Investment) (Amendment) Regulations 2016.
Amendments
2. The Occupational Pension Schemes (Investment) Regulations 2006 ( S.I. No. 294 of 2006 ) are amended—
(a) in Regulation 2 by—
(i) inserting before the definition of “the Act” the following:
“ ‘Act of 1997’ means the Taxes Consolidation Act 1997 (No. 39 of 1997);”,
(ii) substituting for the definition of “collective investment undertaking” the following:
“ ‘collective investment undertaking’ means—
(a) an investment undertaking within the meaning assigned to it by section 739B of the Act of 1997,
(b) a unit trust which neither is, nor is deemed to be, an authorised unit trust scheme within the meaning of the Unit Trust Act 1990 (No. 37 of 1990),
(c) an undertaking for collective investment in transferable securities within the meaning assigned to it by Directive 2009/65/EC of the European Parliament and of the Council of 13 July 20093 , situate in any Member State,
(d) a common contractual fund within the meaning of section 739I(1)(a)(i) of the Act of 1997,
(e) an alternative investment fund within the meaning assigned to it by Directive 2011/61/EU of the European Parliament and of the Council of 8 June 20114 , situated in any Member State; ”,
(iii) inserting after the definition of “collective investment undertaking” the following:
“ ‘credit rating’ and ‘credit rating agency’ have the same meaning, respectively, as they have in Article 3(1)(a) and (b) of Regulation (EC) No. 1060/2009 of the European Parliament and of the Council of 16 September 20095 on credit rating agencies;”,
and
(iv) substituting for the definition of “insurance policy” the following:
“ ‘insurance policy’ means an insurance policy or contract of assurance issued by any person who is the holder of an authorisation—
(a) granted by the Minister for Enterprise, Trade and Employment under the European Union (Insurance and Reinsurance) Regulations 2015 ( S.I. No. 485 of 2015 ), or
(b) granted by the authority charged with the duty of supervising the activities of insurance undertakings in a Member State other than the State in accordance with Directive 2009/138/EC of the European Parliament and of the Council of 25 November 20096 ; ”,
and
(b) by inserting after Regulation 8 the following:
“9.The Pensions Authority is designated as the competent authority in the State in respect of its functions and duties under these Regulations and under Article 1 of Directive 2013/14/EU in relation to a scheme.
10. (1) Taking into account the nature, scale and complexity of the activities of schemes, the competent authority shall monitor the adequacy of credit assessment processes of schemes, assess the use of references to credit ratings issued by credit rating agencies in the investment policies of schemes and, where appropriate, encourage mitigation of the impact of such references with a view to reducing sole and mechanistic reliance on such credit ratings.
(2) Without prejudice to the generality of the foregoing, the trustees of a scheme, other than a small scheme, shall notify the competent authority, in such form as may be prescribed by the authority, where all or part of the resources of the scheme are directly invested in debt instruments, excluding investments in collective investment undertakings and investments in an insurance policy.
(3) Trustees shall, on request, furnish the competent authority with all relevant information on the credit assessment process applied by a scheme.”.
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GIVEN under my Official Seal,
20 December 2016.
LEO VARADKAR,
Minister for Social Protection.
EXPLANATORY NOTE
(This note is not part of the Instrument and does not purport to be a legal interpretation.)
These Regulations transpose the obligations imposed by Article 1 of Directive 2013/14/EU (the Credit Ratings Agencies Directive) which amends Article 18 of Directive 2003/41/EC (the IORP Directive). Directive 2013/14/EU requires pension schemes to avoid relying solely or mechanistically on credit ratings when assessing the risk involved in investments.
1 OJ No. L 235, 23.09.2003, p. 10
2 OJ No. L 145, 31.05.2013, p. 1
3 OJ No. L 302, 17.11.2009, p. 32
4 OJ No. L 174, 1.07.2011, p. 11
5 OJ No. L 302, 17.11.2009, p. 1
6 OJ No. L 335, 17.12.2009, p. 1
S.I. No. 636/2021 –
Occupational Pension Schemes (Investment) Regulations 2021
I, HEATHER HUMPHREYS, Minister for Social Protection, in exercise of the powers conferred on me by section 5 (as amended by section 44 of the Social Welfare Law Reform and Pensions Act 2006 (No. 5 of 2006)), section 59(1C) (inserted by section 33 of the Social Welfare and Pensions Act 2005 (No. 4 of 2005)) and section 61B (as amended by section 37 of the Social Welfare and Pensions Act 2007 (No. 8 of 2007)) of the Pensions Act 1990 (No. 25 of 1990) (as adapted by the Employment Affairs and Social Protection (Alteration of Name of Department and Title of Minister) Order 2020 ( S.I. No. 447 of 2020 )) and for the purposes of giving further effect to Directive (EU) 2016/2341 of the European Parliament and of the Council of 14 December 20161 , hereby make the following Regulations:
Citation
1. These Regulations may be cited as the Occupational Pension Schemes (Investment) Regulations 2021.
Interpretation
2. A word or expression that is used in these Regulations and is also used in the Act shall, unless the context otherwise requires, have the same meaning in these Regulations as it has in the Act.
Definitions
3. In these Regulations –
“the Act” means the Pensions Act 1990 (No. 25 of 1990);
“representative” means a person authorised by a member or beneficiary of a scheme to which the Regulations of 2021 apply, to represent the member or beneficiary, as the case may be, in so far as the information to be provided to the member or beneficiary in accordance with these regulations is relevant to the rights of such a member or beneficiary of the scheme.
Borrowing Rules
4. For the purposes of section 61B of the Act, the trustees of a scheme may borrow money but only for liquidity purposes and only on a temporary basis.
Statement of investment policy principles
5. (a) The statement of investment policy principles required under section 59(1B) of the Act shall be in writing and shall include the following matters –
(i) the investment objective of the trustees,
(ii) the investment risk measurement methods,
(iii) the risk management processes to be used,
(iv) the strategic asset allocation implemented with respect to the nature and duration of pension liabilities, and
(v) information on how the investment policy takes into account environmental, social and governance factors.
(b) For the purposes of section 59(1E) of the Act, in the case of a request by a member, a beneficiary or a representative, the trustees of a scheme shall provide the statement free of charge through electronic means, including on a durable medium or by means of a website, or on paper.
(c) The trustees of a scheme shall ensure that the information contained in the statement referred to in paragraph (b) is –
(i) updated;
(ii) written in a clear manner, using clear, succinct and comprehensible language, avoiding the use of jargon and avoiding technical terms where everyday words can be used instead;
(iii) not misleading, and consistency shall be ensured in the vocabulary and content;
(iv) presented in a way that is easy to read, and
(v) available in the English language.
Revocation
6. The following regulations are revoked:
(a) the Occupational Pension Schemes (Investment) Regulations 2006 ( S.I. No. 294 of 2006 ),
(b) the Occupational Pension Schemes (Investment) (Amendment) Regulations 2007 ( S.I. No. 188 of 2007 ), and
(c) the Occupational Pension Schemes (Investment) (Amendment) Regulations 2010 ( S.I. No. 455 of 2010 ).
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GIVEN under my Official Seal,
25 November, 2021.
HEATHER HUMPHREYS,
Minister for Social Protection.
EXPLANATORY NOTE
(This note is not part of the Instrument and does not purport to be a legal interpretation.)
These Regulations revoke and replace a number of regulations in order to take account of the transposition of obligations imposed by Article 19 of Directive (EU) 2016/2341 which were provided for in section 59AB of the 1990 Act and to give effect to Articles 19(3), 30, 36(2) and 44(b) of that Directive.
These Regulations set out the circumstances in which the trustees of a scheme may borrow money.
In addition, these Regulations set out various matters in respect of the statement of investment policy principles such as –
– providing that such statements shall be in writing,
– specifying the matters which shall be included within such statements,
– obliging trustees of a scheme to provide, on request, a copy of such statement free of charge, and
– specifying requirements in respect of the information contained within such statements where provided on request.
1 OJ No. L 354, 23.12.2016, p. 37