Ireland: Pensions Update

Last Updated: 6 September 2016
Article by Philip Smith, Catherine Austin, Sarah McCague, Michael Shovlin and Marie McQuail
Most Read Contributor in Ireland, October 2018


New Codes for Defined Contribution Schemes

The Pensions Authority (the "Authority") has published the second and third tranches of a proposed four sets of codes of governance (the "Codes") to be published in 2016 to help trustees of defined contribution schemes ("DC Schemes") meet the Authority's standards of practice for good scheme governance and administration. The Codes are not statements of law but rather they are intended to supplement the Authority's Trustee Handbook. These codes do not apply to defined benefit schemes but many of the same principles do. The first tranche was published on 27 January and included Codes on the establishment of a governance plan of action, procedures for trustee meetings and the management of conflicts of interest.

Set 2: Codes relating to contributions, investment and payment of benefits

These Codes give trustees guidance on: monitoring the payment of contributions to a scheme; investing scheme assets in the interests of beneficiaries; and making arrangements for the payment of benefits as they become due. The Codes set out how the trustees may choose to delegate their relevant functions (e.g. to an administrator or an investment manager) but it is stressed that trustees are ultimately responsible for functions carried out by any agent on their behalf. It is recommended that a service level agreement should be entered into between the trustees and the scheme administrator/investment manager.

Comment: Many schemes will have written administration agreements but it may be prudent to review how up to date the agreements are and the level of reporting/monitoring of the service levels.

Set 3: Codes relating to records, data protection and risk management

These Codes cover: effective record keeping procedures; and data protection and risk management. The Codes note that inadequate or incomplete records can negatively impact trustees' ability to pay benefits with knock-on consequences for members. The Codes state that the trustees must also be aware of their data protection obligations to members under the scheme's trust deed and rules. The Codes give guidance to trustees on how to obtain, store and process personal data as the trustees are the persons responsible for the control and use of that personal data i.e. the data controller. The Authority expects that trustees are aware of their obligations as data controllers and that they will comply with the Data Protections Acts of 1988 and 2003.

In accordance with the Codes, the Authority expects trustees to have a risk management system in place. It should include strategies, processes and a risk register to record all known scheme risks. The risk register should be reviewed and updated at least annually by undertaking a risk assessment.

Consultation document issued by the Authority

The Authority has published a proposal for reform of supplementary funded private pensions in Ireland and on which they are seeking consultation from stakeholders by 3 October 2016. The main proposals made by the Authority relate to: changes to trusteeship to require a minimum standard of qualification and experience; the extension of the current system of scheme registration with the Authority to align with international best practice; a proposal to create binding codes of practice on trustees; the rationalisation of pension vehicles and the increased adoption of master trusts.


Companies Act, 2014

The Companies Act, 2014 (the "Act") was generally commenced with effect from 1 June 2015. There is an 18 month transition period ending on 30th November 2016 during which all existing private limited companies will be dealt with as though they are designated activity companies ("DACs"). At the end of the transition period, they will be deemed to have become new model private companies ("LTDs") unless they elect to become DACs or some other type of company. Trustee companies should consider their registration with the CRO if they have not done so already.

Comment: The most significant aspect for "special purpose" trustee companies with restricted objects is that if the company is not converted to a DAC it will lose its restricted objects meaning that its activities are not restricted to trusteeship alone.

ARF Option for DB Members

A change to the Revenue Commissioner's administrative procedures effective from 22 June 2016 means that former defined benefit scheme members whose benefits were transferred to a buy-out bond may now access an Approved Retirement Fund ("ARF") rather than being restricted to the purchase of an annuity.

Negative Revaluation for DB "preserved benefits"

The Occupational Pension Schemes (Revaluation) Regulations, 2006 (the "Regulations") signed by the Minister for Social Protection on 7 April 2016 prescribe a -0.3% revaluation of preserved pension benefits for 2015. A previous amendment made to the Pensions Act, 1990 (the "Act") by the Social Welfare and Pensions Act 2012 provided that the preserved benefit could be adjusted (whereas the Act had previously provided for an increase in the rate). The effect of these two amendments is that preserved pension benefits, for the purposes of the Act, decrease by 0.3% for the revaluation year 2015.

In order to establish how the revaluation percentage applies to deferred benefits under a particular DB scheme, an examination of the scheme rules is required. The deciding factor will usually be whether the rules state that an increase is to be applied or whether it is to be adjusted or revalued. If the rules state increase, then the industry interpretation is that a floor of zero applies. On the other hand, if the scheme rules refer to "revaluation" or "adjustment" of benefits then a negative rate of revaluation could be applied to deferred benefits. By contrast, when considering the technical valuation of preserved benefits for the purposes of the Pensions Act, the starting point is that it is reduced regardless of what scheme rules say.

Comment: Before applying revaluation factors trustees should carry out a review of the scheme provisions, including whether the same provisions apply to all categories of deferred members.


The Commission, the European Parliament and the Council of Ministers have concluded negotiations on the latest draft of the new EU pension's directive.

Comment: The new Directive is unlikely to have a major impact on Irish pensions. The draft legislation no longer requires all trustees to have a professional qualification (which is at odds with the proposals in the Authority's consultation paper). It provides for pre-retirement information to be issued broadly in line with existing Irish law requirements – there was previously a suggestion that this would be issued at least two years before retirement.


Dr David Parris v Trinity College Dublin & Others C-443/15 – European Court of Justice

The Advocate General (the "AG") has delivered her preliminary opinion that Dr Parris and his same sex partner were the subject of indirect discrimination based on their sexual orientation. The case was referred to the Court of Justice of the European Union (CJEU) from the Irish Labour Court following an application by Dr Parris. Three questions were referred to the Court as a result of Dr Parris being advised that as he had not formalised his relationship with his partner prior to Dr Parris's 60th birthday, his partner would not qualify for a survivor's pension under the rules of the scheme. Dr Parris's relationship could not be formalised prior to reaching his 60th birthday as legislation had not yet been enacted to permit this. Dr Parris argued that the rules of the scheme were in breach of the Pensions Act.

In considering the matter, the AG rejected the assertion that Dr Parris had been the subject of direct discrimination. However she supported the applicant's claim that there had been indirect discrimination proposing that this arose from the combined effect of sexual orientation and age (even if discrimination was not made out from each of the individual factors).

The AG also rejected the submission that the decision should be restricted to take account of the fact that the discrimination arose from service which pre-dated the Equal Treatment Framework Directive.

UK Case law and formality requirements in amending pension schemes

Recent UK decisions from the High Court and the Court of Appeal have raised some uncertainty regarding the issue of retrospective amendments to a pension scheme and the level of formality required in doing so.

On 29 February 2016 the High Court of England and Wales held in Safeway Limited v Andrew Newton & Safeway Pension Trustees Limited that the levelling down of pensions (by increasing the Normal Pension Age of women from 60 to 65) by means of amendment followed later by retrospective deed was not effective until the execution of the deed. It was held that the announcement lacked the necessary degree of formality and was not sufficient to achieve retrospective equalisation, even where the amendment power had a provision to back-date an amendment to a specific point in time.

Since the Safeway case, there have been two cases which appear to some extent to demonstrate a relaxation of the degree of formality required in making changes to schemes. In Shannan v Viavi Solutions UK Ltd [2016] EWHC 1530 (Ch) the High Court addressed retrospective amendments to a pension scheme's rules and the substitution of the principal employer. The Court decided that where there is a self-contained power to substitute a principal employer, a "degree of formality" should not be implied where none was expressly provided for and ruled that a substitution was effective without a deed.

In MF Global UK Ltd (In Special Administration), Re [2016] EWCA Civ 569 the Court of Appeal highlighted the effects of informal arrangements in the secondment of employees between group companies. The Court held that although there was no express contract between the service company and the UK subsidiary, the UK subsidiary was liable by way of implied contract for the pension costs of the seconded employees, and this was because it was acting in accordance with the express contract held between MF Global and the service company. The express contract provided that where a group company was using the seconded employees it should pay all the costs (including the pension costs) incurred by the service company in respect of the seconded employees. There was however very little formality to the arrangements and no formal deeds of participation with the pension scheme.

Comment: The level of formality required when attempting to make retrospective amendments to pension schemes remains something of a grey area. The Irish courts have not yet ruled on this issue and it is uncertain how these English decisions would be interpreted by the Irish courts. The better course of action is to ensure that deeds documenting changes are fully drafted in advance of the implementation date to avoid this issue.

This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions