Irish Pensions Authority publishes Code of Practice for trustees

The Irish Pensions Authority (IPA) has published its Code of Practice for trustees of occupational pension schemes and trust retirement annuity contracts (RACs) following a consultation.

The code sets out the IPA’s expectations for the conduct and practice of relevant trustees in complying with specific requirements.

It outlines the authority’s expectations regarding scheme governance, administration, internal control procedures, investment, defined benefit (DB) financial management, fit and proper requirements, and additional requirements for defined contribution (DC) master trusts.

The IPA said it had given careful consideration to the points made in responses to its consultation and has made some changes to the initial draft Code of Conduct, which was published on 22 July, as a result.

Some of the consultation’s 38 respondents noted that the code’s requirement that trustees should have a data strategy was already covered by GDPR, and the authority therefore revised the code to make the distinction between data strategy and GDPR clearer.

Furthermore, the draft code included some requirements that may not have been within the control of trustees, such as the appointment of trustees who much meet the ‘fit and proper’ obligations.

The authority has therefore revised the code to require trustees to bring such matters to the attention of those who have control, make ‘best efforts’ to achieve an appropriate outcome, and inform the IPA if there are issues.

The code was also amended to make it clearer that trustees’ remuneration policies must address any incentives for behaviour that may not be aligned with the interests of scheme members, irrespective of who pays the remuneration.

Several respondents raised concerns that the requirement for trustees to provide detail about how they arrived at decisions would create legal risk or endanger legal privilege for trustees, with the code being revised to “take account of these concerns”.

Although some respondents issued concerns that the draft code was too prescriptive and it made insufficient allowance for trustees to exercise their judgment, the IPA noted that the code was intended to set a minimum standard for what the authority expected, and it was open for trustees to go beyond it.

The Code of Practice will be updated and adapted over time, and the authority will be publishing further information in the coming weeks.

Specifically, it will be publishing instructions on outsourcing notification on 1 December, guidance for the public and employer about the minimum standard they should expect from master trusts during the week of 13 December, and a finding report from the authority’s engagements with master trusts, DB and DC schemes during the week of 13 December.

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