Power & Duties
Pension Authority Guidance
So you’re a pension
scheme trustee
A brief guide to your duties and
responsibilities
www.pensionsauthority.ie
The Pensions Authority
Verschoyle House
28/30 Lower Mount Street
Dublin 2
Tel: (01) 613 1900
LoCall: 1890 65 65 65
Fax: (01) 631 8602
Email: info@pensionsauthority.ie
Web: www.pensionsauthority.ie
We have made every effort to ensure that this information booklet is correct,
however no liability whatsoever is accepted by the Pensions Authority, its
servants or agents for any errors or omissions in the information contained
in this booklet or for any loss occasioned to any person acting or refraining
from acting as a result of any statement in this booklet.
© Copyright the Pensions Authority (February 2015).
All rights reserved.
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So you’re a pension scheme trustee
Contents
1. Introduction 3
2. Company pension schemes 4
3. Trust law 5
4. Who cannot be a trustee 6
5. Day-to-day administration 7
6. Trustees’ duties under the Pensions Act 8
n Trustee training 8
n Registering the scheme 9
n Ensuring that contributions are received 9
n Investing the funds 9
n Making arrangements for the payment of benefits 10
n Seeing that records are kept 11
n Preserving or transferring benefits 12
n Checking that the funding standard is met 12
n Registered administrators 13
n Giving out information 14
n Applying equal pension treatment 14
n Distributing the resources of the scheme on wind-up 16
7. Compulsory and voluntary reporting to the Pensions Authority 17
8. Trustees’ responsibilities – PRSAs 18
9. Compliance with the pension provisions of the Family Law Acts 20
10. Cross-border pension schemes 21
11. The Pensions Ombudsman 22
So you’re a pension scheme trustee
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12. Legal penalties for breach of duties 23
13. Trustee handbook and trustee training 24
14. Glossary of terms 25
15. Useful addresses 29
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So you’re a pension scheme trustee
Introduction
The Pensions Authority is a statutory body set up under the Pensions
Act 1990. The Authority regulates occupational pension schemes,
trust RACs and Personal Retirement Savings Accounts (PRSAs) in
Ireland.
As a trustee of an occupational pension scheme, also called
a company pension scheme, you have duties and responsibilities
under trust law, under other relevant legislation and under
the Pensions Act, 1990, as amended.
This booklet gives concise guidance on your duties and
responsibilities and includes some definitions that may be
helpful to you.
This booklet is not intended to be a complete guide or an
interpretation of the law. You will get comprehensive guidance
for trustees in the Pensions Authority’s ‘Trustee handbook’, which
is available on the Authority’s website. The Authority has developed
an e-learning facility for trustees which is free of charge and can be
accessed through our website or is available at
http://trusteetraining.pensionsauthority.ie.
What does that mean?
Don’t be confused by pensions jargon.
See the Glossary for definitions of terms in bold print.
So you’re a pension scheme trustee
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Company pension schemes
A pension scheme is a type of trust and a company pension scheme
(often called an occupational pension scheme) is a good example of
one. In its simplest form, a trust is an arrangement under which
assets are held and looked after on behalf of others (called
beneficiaries).
A person who holds and looks after pension assets for the benefit
of members and their dependants is called a trustee. Although
assets are held in the name of the trustees, they do not belong to
them. The conditions of the trust under which the pension scheme
is set up are detailed in a legal document called the trust deed
and rules. It sets out who can join the scheme, what the benefits
are and what contributions are paid.
There are two basic types of company pension scheme:
n Defined benefit schemes (sometimes called “final salary” plans):
retirement benefits are calculated to a specific formula that
creates a set level of income. The amount paid is usually
related to each member’s length of service and/or earnings
before retirement.
n Defined contribution schemes (sometimes called “money
purchase” plans): the retirement benefits paid to each member
are not set. They depend on the amount of contributions paid in
for that member and the investment earned on those
contributions.
Trustees should know which type of scheme they have responsibility
for as there are different requirements under the Pensions Act for
each type of scheme.
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So you’re a pension scheme trustee
Trust law
The duties of pension scheme trustees under trust law include:
n administering the trust in accordance with trust law,
all other law and the terms of the trust deed and rules
n acting in the best interests of beneficiaries
n acting fairly between beneficiaries
n acting prudently and diligently
n exercising care and utmost good faith in all trustee duties
n seeking professional advice as necessary
n supervising those to whom functions have been properly
delegated
n not making personal profit from the trust
n being aware of possible conflicts of interest.
A trustee who is negligent, does not act in good faith or breaks the
rules of the trust can be sued by the beneficiaries. They can be held
personally liable for the entire amount of any loss that has occurred.
Trustees must take great care to make sure that all information
received in their capacity as trustees is treated in the strictest
confidence and only used for the purposes for which it has been
given.
A trustee does not have the power to negotiate or vary the terms
and conditions of the scheme. Trustees can only do what is set out
in the trust deed and rules. They cannot act as a representative of
the employer or the members.
So you’re a pension scheme trustee
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Who cannot be a trustee
The Pensions Act states that a trustee cannot be someone who:
n is an undischarged bankrupt (currently certified bankrupt)
n has made an arrangement with creditors and has not fulfilled
the obligations under that arrangement
n has been convicted of an offence involving fraud or dishonesty
n is restricted, under Section 150 of the Companies Act, from
being involved in the formation or promotion of a company
for a defined period of time.
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So you’re a pension scheme trustee
Day-to-day administration
The trustees of most pension schemes do not actually carry out
the day-to-day business of the scheme. In some cases, they appoint
a person within the company to do this. More often, they appoint
a pensions consultant, a professional administrator or a life
assurance company. Trustees are obliged to appoint a registered
administrator to carry out specified core administration functions
unless they appoint themselves to carry out the tasks.
Pensions administration has a wide variety of activities, including:
n contact with external authorities (e.g. Revenue and the Pensions
Authority)
n contact with members
n paying benefits
n keeping records
n financial management
n overseeing the scheme accounts
n providing documents to others.
Even when the day-to-day administration is delegated, the trustees
are still responsible for the scheme. They must ensure that all the
above duties and those set out in the Pensions Act are carried out.
So you’re a pension scheme trustee
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Trustees’ duties under the Pensions Act
The Pensions Act clearly sets out the duties and responsibilities of
trustees. There is a high degree of overlap between trustees’ duties
under the general principles of trust law and their duties as
prescribed in the Pensions Act.
The trustees’ duties under the Pensions Act are explained below.
Trustee training
Every trustee must undertake trustee training in accordance with the
Pensions Act.
Trustees are required to receive training on:
(a) the Pensions Act, the regulations made under it and any
other law that affects the operation of their scheme or trust RAC
(b) the duties and responsibilities of trustees generally.
Trustees are required to receive training within six months of their
appointment and at least every two years thereafter.
Where a person was a trustee before 1 February 2010,
the training must have been completed before 1 February 2012. They
must then undertake training at least every two years thereafter.
An employer who operates a pension scheme is obliged to arrange
for the scheme trustees (and, in the case of a trustee that is a body
corporate, for all the directors of that body corporate) to receive
appropriate training.
However, an employer is not required to arrange appropriate training
for:
(a) a pensioneer trustee, or
(b) a professional trustee.
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So you’re a pension scheme trustee
Registering the scheme
Trustees must register their scheme with the Pensions Authority and
pay the annual fee. Schemes must register within one year of their
start date.
A pensions consultant, administrator or life assurance company
doing the day-to-day running of the scheme will usually arrange
for registration and payment of fees. However, it is the responsibility
of the trustees to ensure that their scheme is registered, with the
registration details updated at least once a year and the annual
fee paid.
Ensuring that contributions are received
The trustees shall make sure, as far as is reasonable, that
contributions payable by the employer and members are received.
One way to do this is to agree with the employer procedures and
dates for the payment of these pension contributions. The dates
may be specified in the scheme rules or, for defined benefit
schemes, in the actuary’s valuation report, and should be adhered
to. If dates are not specified, contributions should generally be made
monthly or quarterly.
The Act also requires the employer to pay contributions within
a specified time, except in respect of employers’ contributions
to a defined benefit scheme. The Pensions Authority has produced
a set of frequently asked questions (FAQs) about the remittance
of contributions, which are available on the Authority’s website.
Investing the funds
The trustees must ensure that the resources of the pension scheme
are properly invested in line with investment regulations and the
scheme’s trust deed and rules.
So you’re a pension scheme trustee
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Trustees usually delegate the actual investment to a professional
investment manager. Nevertheless, the trustees are responsible
for monitoring the conduct of the investment manager and the
performance of the assets.
If a scheme has not appointed an investment manager, the trustees
must show the Pensions Authority that they have appropriate
qualifications and experience to assess and advise on investment
options, and to make investment decisions. If a trustee who has been
approved by the Authority leaves the trust, any new trustee appointed
to fill the investment role must get similar approval from the Authority.
Subject to the Pensions Authority’s approval, trustees can also employ
an adviser with the appropriate qualifications and experience. An
application for approval should be made by the trustees or the
proposed adviser. The application form is available on the Authority’s
website. The Authority’s approval must be obtained before any
investment is made.
Trustees are also required to invest the contributions within ten days
of the latest date by which the employer should have paid them.
The Pensions Authority has produced a detailed set of frequently
asked questions (FAQs) about investment regulations, which are
available on the Authority’s website.
Making arrangements for the payment of benefits
The Pensions Act also specifies that trustees should make
arrangements for the timely payment of benefits.
A company pension scheme may provide benefits in the following
circumstances:
n retirement at or before normal pensionable age or due
to ill-health
n death before or after retirement
n on leaving the company
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So you’re a pension scheme trustee
Many company pension schemes appoint an agent (e.g. the scheme
administrator, the employer or the insurance company) to pay
the benefits or arrange for annuities to be bought through a life
assurance company. The trustees’ duty is to ensure that beneficiaries
are paid regularly and do not have to take unreasonable steps to get
their benefits.
In most schemes, trustees may have to decide the distribution and/
or method of payment of benefits. For example, the scheme may
allow death benefits to be paid to one dependant or split between
several dependants. Trustees must find out the full circumstances of
each case before making a decision; if in doubt, they should seek
professional advice.
Seeing that records are kept
Under the Pensions Act, trustees are obliged to make sure that
appropriate membership records and financial data are kept.
Typically, member records will include the member’s name, gender,
date of birth, date of joining the company and date of joining the
pension scheme, marital status, details of dependants and other
beneficiaries, present and past annual salary details, transfer values
received and benefits granted, member contributions and additional
voluntary contributions (AVCs). Members may be active, deferred
or pensioner members and accurate records should be held in every
case. Trustees may also find it useful to have the PPS numbers of all
members. The type and amount of information kept will depend on
the scheme and the types of benefit provided.
Trustees frequently delegate the administration of the scheme
(including collection of contributions) to third parties or the
employer and the professional investment managers. However,
overall responsibility of stewardship of the scheme’s assets,
transactions and record keeping rests with the trustees.
So you’re a pension scheme trustee
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Financial records include the trustee bank account, all financial
transactions and financial reports received from third parties
(e.g. an investment manager). The financial records are frequently
kept on behalf of the trustees by an administrator, who may also
prepare the accounts for audit.
Preserving or transferring benefits
The trustees must make sure that the necessary arrangements
are made for early leavers of the scheme to have their benefits
preserved, revalued or transferred to another pension plan. They
will also have to accept transfers in when new employees join the
company pension scheme.
There is further information on the preservation and transfer of
benefit requirements in the Pensions Authority booklet ‘How does my
pension scheme work?’ This is available on the Authority’s website.
Detailed technical guidance notes on ‘Preservation of benefits and
minimum value of contributory retirement benefits’ are also
available on the Authority’s website.
Checking that the funding standard is met
The trustees of a defined benefit scheme must ensure that the
scheme complies with the minimum funding standard (MFS)
as required by the Pensions Act.
At least every three years, trustees of defined benefit schemes
must provide an actuarial funding certificate (AFC) to the Pensions
Authority. This certificate is prepared by the scheme’s actuary and
states if the scheme has enough assets to comply with its legal
funding requirements. In the annual report, the actuary must
also give an opinion on whether or not the scheme continues
to satisfy the funding standard.
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So you’re a pension scheme trustee
If the scheme does not satisfy the funding standard, a funding
proposal to rectify the situation must be prepared within an
agreed period of time. This plan must be agreed with the
employer and the actuary.
The Act’s provisions on the preparation of the AFC and a funding
proposal are detailed and complex. It is important for trustees to
have a good understanding of these matters and discuss them
in detail with the actuary and/or the scheme advisers.
Further information on the minimum funding requirements is
contained in the Pensions Authority booklet ‘How does my pension
scheme work?’ which is available on the Authority’s website.
Registered administrators
Trustees of every scheme (including large trust RAC schemes) must
appoint a registered administrator to provide various services to the
scheme (known as “core administration functions”). The “core
administration functions” are the preparation of annual reports and
annual benefit statements for the trustees, the maintenance of
sufficient and accurate records of members and their entitlements to
discharge the above functions and the submission of Annual Scheme
Information (ASI) to the Pensions Authority. Trustees can appoint
themselves as registered administrators provided that they are
satisfied as to their competence to undertake the core administration
functions, and that they have the necessary systems and procedures
in place to do so.
Failure by the trustees to appoint a registered administrator will
constitute an offence under the Pensions Act.
The Pensions Authority has produced a detailed set of frequently
asked questions (FAQs) about registered administrators, which is
available on the Authority’s website.
So you’re a pension scheme trustee
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Giving out information
Trustees must make available certain documents and information
about the scheme and its operation to members and other specified
persons (such as prospective members, spouses of members, other
beneficiaries and authorised trade unions that represent members).
The general information they must allow to be given out includes:
n details about the set up and rules of the scheme
n certain basic information about the scheme
n details of an individual’s benefit entitlements under the scheme.
Trustees must also arrange for:
n actuarial valuations (in the case of a defined benefit scheme)
n annual audited accounts (if required)
n annual reports to be prepared and made available,
subject to certain exceptions and alternatives.
They must also make sure the information is given within
the timescales specified in the legislation.
The booklet ‘How does my pension scheme work?’, which is available
on the Authority’s website, sets out what information trustees of an
occupational pension scheme must provide, when this information
must be given and how it should be given. More detail on these
requirements is provided in the appropriate guidance notes available
on the Authority’s website.
Applying equal pension treatment
According to the Pensions Act, which gives effect to EU law in this
regard, trustees of company pension schemes, with certain
exceptions, must see that their scheme complies with the principle of
equal pension treatment.
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So you’re a pension scheme trustee
Originally the Act simply prohibited discrimination on the grounds
of gender. However, it now bans pension discrimination on the
grounds of:
n gender
n marital status
n family status
n sexual orientation
n religion
n age
n disability
n race
n membership of the Traveller community.
The principle of equal pension treatment applies to the trust deed
and rules of the scheme on such matters as:
n access to the scheme
n contribution arrangements
n entitlement to, and calculation of, benefits
n retirement ages
n survivors’ benefits.
However, it is not a breach of equal pension treatment if schemes
fix an age for admission to the scheme or for entitlement to benefits,
including setting different ages for employees, or groups or categories
of employees, provided that this does not result in discrimination on
grounds of gender.
So you’re a pension scheme trustee
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Trustees should have the scheme’s trust deed and rules examined
on a regular basis to make sure that they follow the principle of
equal pension treatment.
A person claiming a failure of the equal pension principle may refer
his/her case to the Equality Tribunal (see section 15 for contact details).
Guidance notes on equal pension treatment are available on the
Authority’s website as well as the booklet ‘A brief guide to equal
pension treatment’.
Distributing the resources of the scheme on wind-up
Trustees of a pension scheme that is being wound up must use
the assets of the scheme to settle its liabilities without undue delay.
When a decision is taken to wind up the pension scheme, trustees
must notify members, their trade unions and the Pensions Authority
within 12 weeks of the decision. Trustees have a duty to make sure
that members’ pension rights are secured and the wind-up is
completed as soon as is practical. Members must also be informed
in reasonable time of their benefit rights and options under the
wind-up rules, including who will pay the benefits after wind-up,
the address for enquiries and how any surplus or deficit in the
pension fund has been dealt with.
There is more information on scheme wind-ups in the Pensions
Authority booklet ‘How does my pension scheme work?’, which is
available on the Authority’s website.
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So you’re a pension scheme trustee
Compulsory and voluntary reporting to the Pensions
Authority
Where a trustee has reason to believe that material misappropriation
or fraudulent conversion of the resources of a scheme, trust RAC or
PRSA has occurred, is occurring or is to be attempted, he/she must
report details of this, in writing, to the Pensions Authority.
The duty to report is absolute and the penalty for anyone convicted
of failing to do so is a fine and/or imprisonment. Anyone who
makes such a report in good faith cannot be sued for breach of
confidentiality or breach of any other duty that may necessarily
occur. Although not duty-bound to do so, any person may report to
the Authority concerning the state and conduct of a scheme, trust
RAC or PRSA. Guidance notes on reporting requirements are available
on the Authority’s website.
So you’re a pension scheme trustee
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Trustees’ responsibilities – PRSAs
A Personal Retirement Savings Account (PRSA) is a pension
designed for employees, the self-employed, homemakers, carers,
unemployed people or any other category of person. It is a contract
between an individual and an authorised PRSA provider for an
investment account.
There are two types of PRSA – a Standard PRSA and a non-Standard
PRSA. The main differences between them are the charges and
investment options.
If you have a Standard PRSA, you:
n cannot be charged more than 5% on the contributions
you pay and 1% a year on the managed funds
n can only invest in pooled funds, except for temporary
cash holdings
n do not have to buy another product, such as life assurance,
when you are applying for your Standard PRSA.
If you have a non-Standard PRSA, there is no limit on charges and
you can invest in a range of funds, including (but not restricted to)
pooled funds.
The Pensions Act states that employers must enter a contract with
a PRSA provider to let employees participate in a Standard PRSA if:
n the employer is not operating an occupational pension scheme
n the employer is operating an occupational pension scheme
that only provides death in service benefits
n the employer is operating an occupational pension scheme
that limits eligibility for membership
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So you’re a pension scheme trustee
n the employer is operating an occupational pension scheme
that imposes a wait for membership of more than six months
from the start of employment.
If the occupational pension scheme does not allow for additional
voluntary contributions (AVCs), a Standard PRSA must be offered
for AVC purposes.
The legal obligation to comply with these PRSA access requirements
rests with the employer. The trustees’ obligation is to monitor
contribution and benefit levels for Revenue purposes where AVCs
are made via a PRSA.
Where AVCs are paid via a PRSA separate from the main pension
scheme, the trustees of the main scheme do not have a legal
responsibility to monitor these contribution and benefit limits.
However, they are legally obliged to comply with the Disclosure of
Information Regulations regarding members’ entitlement to
information.
The Pensions Authority has produced a booklet ‘Personal Retirement
Savings Accounts (PRSAs) – A consumer and employers’ guide to
PRSAs’, which is available on the Authority’s website.
So you’re a pension scheme trustee
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Compliance with the pension provisions of the Family
Law Acts
The Family Law Act, 1995, addresses pension benefits where judicial
separation and foreign divorces recognised in this country have taken
place. Similar legislation on Irish divorce is set out in the Family Law
(Divorce) Act, 1996. Both these Acts state that pension rights must be
taken into account where, after a judicial separation or divorce, the
parties apply to the Court for a relevant financial settlement. These
requirements also apply to civil partners and cohabiting couples. The
Acts also give the Courts the power to instruct trustees of a pension
scheme to pay out benefits (usually arising from a Court order). Such a
direction by the Court overrides the scheme trust deed and rules.
Under the Disclosure of Information Regulations of the Pensions
Act, the spouse of a member of an occupational pension scheme is
entitled, on request, to get specified basic information about that
scheme (including legal documentation and annual reports and, if
produced, copies of audited accounts and actuarial valuations). The
Disclosure of Information Regulations apply if divorce proceedings
have been instituted under either of the Family Law Acts. They
continue to apply after a divorce decree is granted.
The Court may also direct the trustees to provide to the former
spouse more specific information about the member’s benefits. Such
information must be provided within the period specified by the Court.
The pension provisions of the Family Law Acts are among the more
detailed statutory requirements with which trustees have to comply.
Trustees should have a general understanding of all aspects of these
provisions so as to promote full compliance. There is more detailed
guidance in the booklet ‘A brief guide to the pension provisions of
the Family Law Acts’, which is available on the Authority’s website.
Guidance notes on the pension provisions of the Family Law Act,
1995, Family Law (Divorce) Act, 1996 and the Civil Partnership and
Certain Rights and Obligations of Cohabitants Act, 2010 are also
available on the Authority’s website.
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So you’re a pension scheme trustee
Cross-border pension schemes
The Pensions Act requires compliance with the cross-border
requirements of Directive 2003/41/EC on the activities and
supervision of Institutions for Occupational Retirement Provisions
(known as the IORP directive). The directive establishes that an
IORP, which in the Irish context is an occupational pension scheme,
can provide cross-border services anywhere in the EU or European
Economic Area (EEA).
Cross-border activity occurs where an IORP registered in Ireland
accepts contributions from an employer based in another Member
State or vice versa. If an Irish pension scheme is seeking to operate
in another Member State, the trustees of the scheme must comply
with certain authorisation and notification procedures set down in
the Pensions Act. The Pensions Authority has published guidelines in
relation to cross-border schemes, which are available on the
Authority’s website.
So you’re a pension scheme trustee
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The Pensions Ombudsman
The Pensions Ombudsman investigates and adjudicates on complaints
made, in writing, by or on behalf of an actual or potential beneficiary
of an occupational pension scheme, PRSA, or trust RAC who alleges
financial loss as a result of maladministration by those responsible
for managing the scheme.
The Ombudsman can also investigate and decide on disputes of fact
or law arising from an act (or failure to act) by those responsible for
a scheme. Such claims must be communicated, in writing, by an
actual or potential beneficiary. It is up to the Pensions Ombudsman
to decide which cases to investigate.
The persons responsible for the management of the scheme include
any trustee or former trustee, any employer or former employer and
any administrator of the scheme.
The Pensions Ombudsman Regulations state that the trustees of
every occupational pension scheme must establish Internal Disputes
Resolution Procedures (IDR). The regulations set out certain steps that
must be included in the IDR, as well as matters to be covered by them.
The following information is available from the Pensions
Ombudsman (see section 15 for contact details):
n What can the Pensions Ombudsman do for you?
n Guidance notes for trustees on internal disputes resolutions
n Guide for respondents.
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So you’re a pension scheme trustee
Legal penalties for breach of duties
Court proceedings may be taken against trustees for non-compliance
with the Pensions Act. The Pensions Authority may bring a case to the
District Court or, for more serious allegations, refer the matter to the
Director of Public Prosecutions (DPP), who may want to prosecute
in a higher Court by way of a charge sheet (called an indictment).
The consequences are as follows:
n On summary conviction (in the District Court), persons found
guilty of an offence under the Act will get a fine not exceeding
€5,000, imprisonment for up to one year or both.
n On indictment in a higher Court, persons convicted of a breach
of the Act will get a fine not exceeding €25,000, imprisonment
for up to two years or both.
However, on-the-spot fines provide an alternative to prosecutions of
certain offences under the Pensions Act. The Act allows the Pensions
Authority to notify a person in writing about a specified summary
offence, giving 21 days to remedy it and pay the appropriate fine. If the
offence is remedied and the fine paid, the prosecution will not proceed.
The Pensions Authority has published a trustee and employer
checklist in relation to on-the-spot fines, which is intended to help
trustees and employers ensure they do not breach the Pensions Act.
The checklist is available on the Authority’s website.
So you’re a pension scheme trustee
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Trustee handbook and trustee training
Being a pension scheme trustee carries a wide range of duties
and responsibilities – perhaps more than you thought.
The Pensions Authority has drawn up a register of approved trustee
training courses. Contact the Authority for more details or see the list
on our website.
The annual report of the pension scheme must state whether
trustees have access to appropriate training about their duties
and responsibilities.
An employer who operates a scheme is required to arrange for the
trustees to receive appropriate training in relation to the Pensions
Act and any other law that governs the operation of their scheme.
They are also required to receive training on their duties,
responsibilities and other matters relevant to the management of
their scheme.
For further information on this requirement contact the Pensions
Authority directly. The Authority also produces a ‘Trustee handbook’.
This has been published online and is free to download from the
Authority’s website.
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So you’re a pension scheme trustee
Glossary of terms
Active member: A member of a pension scheme who is in “reckonable
service”, i.e. currently in the employment to which the scheme relates
and who is included in the scheme for a pension benefit.
Actuarial funding certificate (AFC): A certificate that trustees of a
defined benefit scheme must submit to the Pensions Authority at
least every three years. It is signed by an actuary. The certificate
demonstrates that the scheme complies with the funding standard
under the Pensions Act, stating whether the scheme is capable of
meeting specified liabilities in a statutory order of priority in the
event of its being wound up on the date of the certificate.
Actuarial valuation: An investigation by an actuary into the ability of
a pension scheme to meet its benefit promise. This is usually done to
calculate the recommended contribution rate, which takes account of
the actuarial values of assets and liabilities of the fund. The actuary
also needs to conduct this investigation to complete a funding
certificate.
Actuary: The individual appointed by the trustees of an occupational
pension scheme to carry out valuations and advise on funding
matters.
Additional voluntary contributions (AVCs): Additional contributions
paid by a member of an occupational pension scheme in order
to secure benefits over and above those set out in the rules of the
scheme. Where an occupational pension scheme does not provide
access to an AVC facility, a standard PRSA must be offered for this
purpose.
Annual report: The Pensions Act requires the trustees of a
pension scheme to communicate information about the scheme,
its administration and its financial position on an annual basis.
The content of the annual report is specified in the Disclosure
of Information Regulations. A shorter annual report called an
alternative annual report may be compiled by small defined benefit
So you’re a pension scheme trustee
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schemes and defined contribution schemes with less than 100
members (including deferred members).
Beneficiaries: A person who is entitled to benefit under a pension
scheme, or who will become entitled in specific circumstances (e.g.
on the death of a member).
Company pension scheme: See ‘occupational pension scheme’.
Deferred member: A person entitled to a pension payment at a
future date. This is normally an early leaver of a pension plan. The
term is sometimes used to describe someone whose retirement is
being postponed.
Defined benefit scheme (also known as “final salary” scheme):
Defined benefit schemes provide members with retirement and
death benefits based on formulae set out in the rules of the scheme.
Benefits are often based on a member’s salary close to retirement
and on his or her pensionable service. For this reason these schemes
are sometimes known as “final salary” schemes.
Defined contribution schemes (also known as “money purchase”
plan): Provides a pension based on the accumulated value of
contributions paid to a pension scheme and the investment returns
earned on those contributions.
Dependant: A person who depends financially on a scheme member
or pensioner. Children are regarded as dependants until they reach
the age of 18 or leave full-time education or vocational training. A
spouse is always regarded as a dependant.
Disclosure of Information Regulations: Regulations issued under
the Pensions Act requiring specific information about pension
schemes and their benefits to be disclosed to interested parties.
Investment manager: A person or body to which the investment
of the whole or part of the assets is delegated by the trustees in
accordance with the provisions of the trust document.
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So you’re a pension scheme trustee
Investment regulations: Regulations issued under the Pensions
Act setting out certain investment rules that trustees must comply
with when investing the assets of a pension scheme. The relevant
statutory instrument references are S.I No. 294 of 2006, S.I. No. 188
of 2007 and S.I. 455 of 2010.
Member: A person who has been admitted to membership of a
pension scheme and who is entitled to benefits under the scheme.
This will include active members, pensioners and deferred pensioners.
Normal pensionable age: This is the age at which retirement
benefits become payable. This will be set out in the governing
documents of an occupational benefit scheme.
Occupational pension scheme: A pension scheme set up by an
employer to provide retirement and/or other benefits for employees.
It is sometimes called a “company pension scheme”.
Pensioner member: A person being paid from a pension scheme
(also called a pensioner).
PPS number: Personal Public Service number – a unique reference
number for each person in the State that identifies the person for all
matters related to tax, social insurance and social welfare benefits.
Personal Retirement Savings Account (PRSA): A PRSA is a personal
pension plan that you take out with an authorised PRSA provider. It is
like an investment account that you use to save for your retirement.
PRSAs are a type of defined contribution scheme. You make regular
contributions to your pension, and a proportion of these are tax
deductible A register of authorised PRSA providers and their approved
PRSA products is available on the Pensions Authority’s website.
Pooled funds: Also known as managed funds, these are collective
investment schemes in which investors’ money is pooled to buy a
portfolio of assets including Government bonds, deposits, property
and stocks.
So you’re a pension scheme trustee
28
PRSA provider: An authorised investment firm, life assurance
company or credit institution which produces, markets or sells PRSA
products.
Transfer value: If you leave an occupational benefit scheme with
entitlement to deferred benefit, then you may be entitled to elect
to transfer your benefits to either a new employer’s scheme, to a
Personal Retirement Bond, or to a PRSA (only possible if less than 15
years’ service completed). In the case of a defined benefit scheme,
the transfer value represents the actuarial value at the date of
transfer of any pensions payable to your dependants in the event of
your death. In the case of a defined contribution scheme, the transfer
value represents the accumulated value at the date of transfer of the
employer and employee contributions.
Trust deed and rules: Occupational benefit schemes are usually set
up under trust. The trust deed and rules govern how the scheme is
managed and sets out how the benefits are determined and to whom
they are payable.
Trustee: An individual or a company which alone or jointly becomes
the legal owner of assets to be administered for the benefit of
someone else (beneficiaries), in accordance with the provisions of the
document creating the trust, and the provisions of trust law generally
and the Pensions Act.
Trust law: Trust law comprises a number of statutory provisions
dating back to the Trustee Act, 1893 and principles of equity which
have evolved over many years in cases decided in the Courts.
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So you’re a pension scheme trustee
15.Useful addresses
The Pensions Authority
Verschoyle House
28/30 Lower Mount Street
Dublin 2
Tel: (01) 613 1900
LoCall: 1890 65 65 65
Fax: (01) 631 8602
Email: info@pensionsauthority.ie
Web: www.pensionsauthority.ie
Department of Social Protection*
Oisin House
Pearse Street
Dublin 2
Tel: (01) 704 3000
LoCall: 1890 20 23 25
Web: www.welfare.ie
* For information on PRSI
Department of Social Protection**
Social Welfare Services
College Road
Sligo
Tel: (071) 915 7100
LoCall: 1890 50 00 00
Email: info@welfare.ie
Web: www.welfare.ie
** For information on entitlements to State pension benefits
So you’re a pension scheme trustee
30
Revenue***
Financial Services (Pensions)
Ballaugh House
73-79 Lower Mount Street
Dublin 2
Tel: (01) 613 1800 (ask for Pensions Unit)
Fax: (01) 647 4139
Email: www.lcdretirebens@revenue.ie
Web: www.revenue.ie
*** For information on pensions taxation
The Pensions Ombudsman
36 Upper Mount Street
Dublin 2
Tel: (01) 647 1650
Fax: (01) 676 9577
Email: info@pensionsombudsman.ie
Web: www.pensionsombudsman.ie
Central Bank of Ireland
PO Box 559
College Green
Dublin 2
Tel: (01) 224 6000
LoCall: 1890 77 77 77
Fax: (01) 671 6561
Email: enquiries@centralbank.ie
Web: www.centralbank.ie
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So you’re a pension scheme trustee
Financial Services Ombudsman
3rd Floor, Lincoln House
Lincoln Place
Dublin 2
Tel: (01) 662 0899
LoCall: 1890 88 20 90
Email: enquiries@financialombudsman.ie
Web: www.financialombudsman.ie
Consumers’ Association of Ireland
26 Upper Pembroke Street
Dublin 2.
Tel: (01) 637 3961
Fax: (01) 662 0365
Email: cai@thecai.ie
Web: www.thecai.ie
The Equality Tribunal
Davitt House
65A Adelaide Road
Dublin 2.
Tel: (01) 613 6800
Fax: (01) 613 6801
Email: info@equalitytribunal.ie
Web: www.equalitytribunal.ie
www.pensionsauthority.ie