The regulations that will come when the European Union's IORP II Directive is implemented will lead to a thorough review of trustee culture and activity, the Irish Pensions Authority said.

Speaking at the Irish Association of Pension Funds’ (IAPF) Annual Benefits Conference in Dublin, Irish Pensions Authority CEO Brendan Kennedy said it will now have to change the relationship it has with schemes and stay in touch with trustees on a regular basis rather than on exceptions.

“We will be looking at the culture of the scheme, how they prioritise the interest of their members. The culture of a pension scheme is not a conversation that I think we have had before,” Kennedy said.

The authority plans on assessing the conditions of the trustees and the board, how well they are doing their job, working effectively together to reach the objectives of the scheme.

“Pension schemes are about people looking out for other people’s money. And if someone is looking out for your money you need to be confident that the person (…) is doing it in your favour.”

The IORP II regulations, which is set to launch on 13 January 2019, aims to promote governance and communication across cross-borders. IAPF chairperson Peter Fahy said the lack of information from the government is worrying.

“We have still not seen any sign of draft legislation to bring that directive into force and we are three months before the final implementation date. This is quite simply unacceptable from an industry perspective and it undermines a lot of the good work that government departments are doing in the other areas of pension reform.

“We would call on the relevant department to publish the draft implementing legislation for IORP II as soon as possible to allow some time for feedback and consultation as it goes through the committee stage.”

Kennedy said the changes that comes with IORP II is a fundamental change to the Irish pensions environment and as the country prepares for the estimated 400,000 people who in 2020 will enter the system through automatic enrolment.

“We, collectively, need to ensure that the pension system is fit for purpose before we put many more people into it, particularly financially inexperienced people.”

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