Holders of Personal Retirement Savings Accounts (PRSAs) or members of occupational pension schemes will be able to complain to a Pensions Ombudsman from July if they lose out financially as a result of poor administration of their pensions.
The Minister for Social and Family Affairs, Ms Coughlan, has announced that Mr Paul Kenny, head of retirement research at Mercer Human Resources, is to take up the office after Easter, following commencement of part of the Pensions (Amendment) Act 2002.
The legally independent Ombudsman is likely to inherit a number of ongoing investigations from the Pensions Board involving pension schemes that broke statutory administration rules.
"The Pensions Board may have concluded that someone had been short-changed, but they have no powers to award compensation," says Mr Kenny.
Now members of occupational schemes, either current workers or retired beneficiaries, and the widow, widower or surviving dependants of deceased members, can receive compensation if things go wrong.
Contributors to PRSAs, the new type of personal pension designed to increase the number of Irish workers with a private pension, can also bring their case to the Pensions Ombudsman.
The Ombudsman can direct that current or former employers, trustees or PRSA providers must pay for any financial loss incurred as a result of the maladministration of the scheme. This may include inadvertent mistakes, failure to allocate funds, a misunderstanding of the scheme rules and miscalculating the amount of a member's benefit.
The amount of compensation that can be awarded cannot exceed the actual benefit that people have lost. Unlike the British Pensions Ombudsman, Mr Kenny will not have the power to grant compensation for any pain, suffering or inconvenience caused by the mishandling of a pension scheme.
The Ombudsman is to launch an information campaign to draw consumers' attention to the office as a new channel for complaints. The campaign will include educational leaflets and the publication of awareness-raising articles in consumer magazines and trade union newsletters.
Pension schemes will be required to set up an internal disputes resolution procedure, so that consumers can attempt to settle problems with their employer or trustees first, before taking a complaint to the Ombudsman. Complaints must be brought to the Ombudsman within six years of the dispute or within three years of the date that the person became aware of the problem, whichever is the earlier.
