Changes in the way in which pensions trustees operate are on the way, as Aongus Horgan, assistant head of information and training at the Pensions Board, explains.
Tighter controls are being brought in on people acting as pensions trustees, including minimum qualifications and training.
These changes will come with the implementation of the Social Welfare and Pensions Act, 2005, and various Ministerial regulations will be required on issues such as trustee training and investment.
It's planned that these regulations will be made before September.
Aongus Horgan explains that the new Act was signed into law on March 14th last, although most of the pensions provisions haven't started yet.
A number of important provisions affecting trustees stem from the implementation of the EU Pensions Directive on the articles of institutions for occupational retirement provisions, which include trusteeship.
In future, certain people will be prohibited from acting as pensions trustees, such as undischarged bankrupts, or anyone who has been convicted of an offence involving fraud or dishonesty.
Regulations will also be made setting out the minimum qualifications and training requirements for scheme trustees. The new Act will give the Minister power to make regulations governing the qualifications and training needed for trustees.
These will vary, depending on whether the trustees are employing suitably qualified advisers.
Horgan adds that the EU Directive has adopted some of the principles of best practice already in use here.
He adds: "In general, most schemes are very well run, but these specific requirements were necessary under the EU Pensions Directive, which has to be implemented by September 23rd."
He also explains that as pensions funds do not have legal personality, this EU Directive has to be applied to the trustees.
Paul Kenny, the Pensions Ombudsman, says: " The provisions of the 2005 Act don't change an awful lot as far as trustee duties are concerned. Mostly, they will codify principles, such as prudence and diversification, that exist in trust law anyway, but seeing them properly written down may be a surprise to some!"
He also says that it's a good idea to get trustees to adopt a Statement of Investment Principles, as it means that some real thought has to go into its compilation. Kenny also says that it's positive that the rules on the disqualification of people from acting as trustees are being strengthened.
That will help member protection, he adds.
However, Paul Kenny warns: "Requirements for trustees to be qualified may have huge implications for schemes where the employer is the sole trustee, which includes the vast majority of smaller schemes.
"Most complaints that we get about trustees would be in schemes of that kind and the majority have their origins in failures of communication."
Speaking on behalf of the Irish Association of Pension Funds (IAPF), Nora Finn, chief executive, comments: "We welcome the EU Pensions Directive. As Ireland has a strong regulatory environment, we believe that many of the requirements of the Directive are already in place.
"There are additional requirements for pension accounts that would be onerous for small pension schemes, so we welcome the fact that there is a small pension scheme exemption."
She goes on to say that the IAPF believes that it is important that trustees should receive training for their role.
"To this end, we've put in place training courses for trustees. However, we do not believe that each trustee should have to become a specialist over one or all aspects of pension trustee work," she says.
Nora Finn says that trustees should seek expert advice on the particular area they are reviewing.
"They need to know how to interpret this." She concludes by warning that if we go down the specialist route, we will lose the generalist knowledge obtained by the trustee.
"We await the final regulations due out this summer." So too does everyone else involved in the pensions business.
