The Pensions Authority in Ireland has published a consultation that sets out its proposals to change the basis on which fees are paid by several types of pension schemes.

Such proposals would affect occupational pension schemes, trust retirement annuity contracts (RACs) and personal retirement savings accounts (PRSA) providers. Part of its motivation for the changes is due to the newly transposed IORP II Directive, which requires the authority to adopt a “forward-looking, risk-based approach” to supervision.

It said this will involve more direct engagement with trustees involving dialogue and scrutiny about how well they are exercising their responsibilities to their members. This will require more staff and significant IT development, it stated. This year, the authority’s fee income is expected to be almost €7m less than total expenditure. This difference will be met by a combination of a €3m exchequer subvention and the reserves accumulated by the organisation in recent years.

However, the Department of Public Expenditure and Reform has stated that the 2021 subvention is a one-off support and that the future costs of the authority must be met from fee income. In addition, the exchequer subvention is recoupable from future fee income. The authority said that if fee levels remain unchanged, fee income in 2022 would represent only about 60 per cent of projected expenditure, a difference much greater than the its reserves.

As a result, it has proposed changing the primary fee to an asset-based levy, charged on an equal basis to occupational schemes and PRSAs. It also plans to introduce a substantial per scheme fee after an interval to allow and encourage scheme consolidation. However, the fee structure and rates would remain unchanged for single member schemes subject to the temporary IORP II derogation.

For occupational pension schemes and PRSAs, there has not been an increase to the fees paid by them since 2002 and there have been two reductions for the fees paid by occupational pension schemes in 2010 and 2011.

“A further review of fees would be carried out in 2024. The authority is launching this consultation to seek views on the proposed change to the basis of the fee structure. The actual amount of those fees is still to be determined but will be based on projected costs of regulatory activity. The Authority will consider the responses to this consultation before submitting a proposal to the Minister for Social Protection in the Autumn,” the authority stated.

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