The powers of The Pensions Board have been greatly enhanced by the introduction on the 17th September 2007 of the new “on the spot” fine regime. Rather that pursuing time-consuming prosecutions of certain breaches of the Pensions Act 1990 as amended (the Act), The Pensions Board may now simply write to employers or trustees who have committed an alleged offence. If they fail to remedy the breach within 21 days, The Pensions Board may impose a fine of €2,000 per offence. The regime applies to a notably high number of offences under the Act and undoubtedly represents a wake up call for trustees and employers. Trustees and employers should now urgently overview compliance with all of their obligations under the Act, including in particular more administrative obligations that might easily be overlooked. Trustees should bear in mind the compliance strategy of The Pensions Board to monitor schemes that have previously come to its attention.
Employers should now be more vigilant to ensure that they:-
comply with a written request for information by The Pensions Board, actuary or trustees;
respond to a request by the Board to confirm and supply pension scheme or standard PRSA documentation; and
provide a monthly statement to employees and trustees of the amount deducted from salary and remitted to the pension scheme or PRSA (if applicable) and the amount paid by the employer;
failure to do so now renders employers liable to fines under the new on-the-spot fine regime.
Offences included in the regime applicable to trustees are more numerous and include failure to:-
make or receive a transfer payment;
register and update scheme details and pay annual fees;
comply with any request for information by the actuary, auditor or trustees;
ensure proper investment of the resources of the relevant scheme and to prepare and review a statement of investment policy principles;
provide members with information on the investment options so that members can give appropriate investment directions;
comply with the rules regarding increases to pension payments in schemes with state pension offset;
submit an actuarial funding certificate if required under the Act;
comply with requirements in relation to the preparation and auditing of the annual accounts;
cause the assets and liabilities of a defined contribution scheme to be valued annually;
furnish a statement of benefits to a member transferring funds to a PRSA;
comply with various requirements in relation to the preparation of the annual report;
comply with disclosure of information requirements such as those applicable to governing documents and explanatory booklets.
Other more serious offences such as an employer’s failure to comply with a section 18 investigation, an employer’s failure to remit contributions and trustees failure to apply equal pension treatment in the scheme rules continue to be prosecuted by The Pensions Board although they have not been included in the on-the-spot fine regime. We must wait to see how effective the new system will be but it certainly seems clear that employers and trustees should take the opportunity to ensure that they are fully aware of and in compliance with all of their obligations under the Act. It would now also seem vital that contracts with administrators are in writing and clearly identify the administrator’s duty to ensure compliance with the relevant legal requirements so that if trustees are fined they may seek to recover such fines from the administrators.