Sunday Times "Single-member pension schemes plunged into chaos"

[Brendan Burgess]

An interesting article from Niall Brady yesterday (Subscription required)

https://www.thetimes.co.uk/article/single-member-pension-schemes-plunged-into-chaos-z555jv2jg

The pension arrangements of up to 100,000 directors and senior staff have been plunged into chaos after the government decided one-member schemes must meet the same governance standards and investment controls as much larger occupational schemes.

However, the new rules, known as IORP II, ban pension schemes from long-term borrowing and restrict their freedom to hold unregulated investments, effectively blocking the one-man schemes from investing in property.

They will also be forced to put in place the same governance standards as much larger occupational schemes with thousands of members

The added regulatory burden, however, will force scheme members to switch to less onerous investment options, according to Jim Connolly, the head of pensions at Goodbody Stockbrokers..

“The supervision requirements and trustee responsibilities will make compliance prohibitive,” he said. “The regulations will force investors to unwind structures, incur costs and inevitably have less money when they retire.”

 

[RETIRED2017]

Don't think it affects PRSAs type setups, ,
Are structures already set up affected ,

 

[Steven Barrett]

Don't think it affects PRSAs type setups, ,
Are structures already set up affected ,

It doesn't effect PRSAs or structures already in place.

Funding levels and investment choices under PRSA's are much more restrictive than those of company pensions.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)

 

[GSheehy]

I'd say the days of the one-(wo)man scheme where the Trustees are the directors of the company may be numbered.

Simply signing a trustee training document to say that you've read it won't suffice. Much in the same way the Central Bank would prefer less intermediaries to regulate, the Pensions Authority would like less Trustees.

It's likely that the product provider may take over the responsibility/cost of the Trusteeship. If they don't, the one-(wo)man schemes may have to farm that out at an estimated annual cost of €350 per annum.

If you're in the market for an Executive/Directors Pension, you should probably buy one where the product provider will manage the Trustee responsibility, at no extra cost.