Change in Legislation for Pension Trustees

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All company, executive and group schemes are written under trust and as such require a Trustee. Up until now the company director of the scheme has also acted as the Trustee without probably realizing it, but that is all about to change. Since February 2010 anybody who is a Trustee of a pension scheme is required to undergo a Trustee training course. This requirement applies whether you are the Trustee of a large company group scheme or whether you are a small business with a pension scheme set up for the directors.  In fact, you could be the Trustee, the Employer and the beneficiary of the pension scheme.
 

What is a Trust and what are the benefits of a Trust?

A trust is an arrangement where assets are controlled by a person (trustee) who has a duty to look after those assets for the benefit of the members.
The main advantage of a Trust is o make sure that the benefits of the pension plan are kept totally separate from the company and are kept safe fore the member and their beneficiaries
 

What does the Trustee do?

The role of the Trustee is to make sure the scheme meets the law and the scheme rules.  The Trustee is not expected to be an expert on pensions and investments, this function is carried out by the administrator which is generally the insurance company providing the scheme. The trustee must act in the best interests of the members and beneficiaries and ensure and information the Trustee receives is treated in the strictest confidence.
 

Why does the Trustee require training?

Regulation is becoming stricter in the Financial Services Industry and pensions are no different.  This is why Trustee training is now a requirement.
What does the training involve?
Training can take a number of different forms such as:

• Attending a dedicated training course.
• Online training at www.pensionsboard.ie.
• Booklet training depending on the life company.

Existing schemes have two years from February 2010 to complete their training and any new pension scheme has six months from the set up date for the Trustees to complete theirs.Some of the life companies are now providing Trustee services where they will act as the Trustee on behalf of the scheme. Many employers who are too busy to act as Trustee themselves are now signing over this role to the companies. Other options are converting existing occupation pension schemes into PRSAs as a PRSA does not require a trustee. Trustees of schemes which have employees who have left service but remain as ‘paid up members' will also require to do this training.  Trustees of these schemes would be well advised to transfer these members to Buy out Bonds and wind up the schemes.

Avoid a Penalty or Fine

Schemes which are not compliant will be fined by the pensions board. We recommend that you avoid leaving this until the last minute. We are writing out to all our corporate schemes advising them of the latest developments and the options open to them.  
 

For more information

Further information on this development can be found by downloading this leaflet from the pensions board.