1. New Pension Developments - focus on Trusteeship Review 6 July 2007 Ciarán Holahan

2. Agenda 1.Overview of Pensions Board/Pensions Act 2.EU Pensions Directive 3.New disclosure regulations 4.NPR/Special Savings Report/Green Paper 5.On-the-spot fines 6.Trusteeship Review 7.Where to find further information 8.Questions

3. 3 Overview of Pensions Board/Pensions Act Part I Preliminary and General Part II Establishment of Pensions Board Part III Preservation of Benefits Part IV Funding Standard Part V Disclosure of Information Part VI Trustees of Schemes Part VII Equal Pensions Treatment Part VIIICompulsory and Voluntary Reporting to the Pensions Board Part IX Miscellaneous Applications to the High Court Part X Personal Retirement Savings Accounts (PRSAs) Part XI Pensions Ombudsman Part XII Cross Border Schemes

4. 4 Overview of Pensions Board/Pensions Act To monitor and supervise operation of Act Issue guidelines to trustees on duties and responsibilities and codes of practice on specific duties Issue guidelines/ guidance notes on duties and responsibilities of PRSA providers in relation to PRSA products Encourage training for trustees Advise Minister on standards for trustees and on their implementation Issue guidelines for scheme administrators on requirements of Act Provide information to members on their rights under the Act Investigate complaints and, if necessary, take Court proceedings for breach of Act Register schemes and PRSAs and collect fees due Advise Minister for Social and Family Affairs on operation of Act and pensions matters generally

5. EU Pensions Directive (IORPs) Trustee qualifications Investment Regulations Actuarial Funding Certificates (AFCs) required every 3 years Cross-border schemes

6. New disclosure regulations S.I. 301 of 2006 revokes 1998 regulations Some major changes: 1.Audited Accounts required for DC schemes with over 100 members (active & deferred) 2.New DB schemes – AFC every 3 years 3.DC schemes – must prepare Valuation Report 4.SIPP – statement of investment policy principles (for schemes with > 100 members) 5.IDR arrangements to be disclosed

7. New disclosure regulations Annual Member Benefit Statements DC schemes Statements of Reasonable Projections (introduction deferred until 1 January 2008) Breakdown of contributions received and invested (and explanation of difference) Investment options for members Disclosure required describing Default Investment Strategy, investment alternatives, charges, risk exposures etc.

8. National Pensions Review/Special Savings Report/Green Paper NPR - published in January 2006 and contained a number of recommendations Special Savings in Retirement Report published August 2006 Green Paper – will contain various options. Current awaiting publication by Government

9. On-the-spot fines Introduced in Social Welfare Law Reform and Pensions Act, 2007 Expected to come into force by September 2007 Alternative to going to court More efficient way of addressing compliance issues Board gives offender 21 days to remedy the offence and pay an appropriate fine (likely to be approx €2,000)

10. Trusteeship Review  In broad terms, trustees’ main duties under the Act are: to ensure contributions are received to ensure contributions are remitted to invest the funds to pay the benefits to ensure that Funding Standard is met to keep records and accounts to preserve or transfer benefits to disclose information to ensure equal pensions treatment to apply the resources of the scheme on wind up to register the scheme with the Pensions Board 3

11. Trusteeship Review – Terms of reference  Part of Board’s programme of policy work Terms of reference Evaluation of trust model of pension scheme governance Identify potential regulatory and governance improvements to perform more effectively Examine supports for trustees Guiding principle Facilitate competent performance and increased governance standards while minimising additional compliance burdens. 5

12. Key recommendations - Trusteeship  Current trust model should be retained  It continues to offer protection to pension schemes that justify its retention  Contracts and master trusts now allow choice  Some improvements can be made to enhance member protection 9

13. Key recommendations – External Regulation To enhance the standard of scheme administration:  Pension scheme administrators should be registered and supervised  Service level agreements between trustees and administrators should be made compulsory. Guidance on appropriate content should be introduced 10

14. Key Recommendations – Trustee Ability To increase the standard of trustee ability, and therefore good governance!  Employers should automatically arrange trustee training for all trustees within 6 months of their appointment and every 2 years thereafter and report in annual report  Potential new means of training (e.g. e-learning) should be explored  New training content e.g. ethics, service level agreements to be introduced 11

15. Key Recommendations – Trustee Remuneration  Link between trustee performance and remuneration unclear  Cost and legal implication of paying trustees  Pensions Board to promote as best practice financial support of trustees through provision of compensation for expenses and adequate paid time off for trustee duties and training, as appropriate 12

16. Key Recommendations – Internal Scheme Governance  Guidance on managing relationships between trustees and with employers to be given in new trustee handbook and training  Each scheme should have copy of Pensions Board’s trustee handbook with a trustee checklist  Pensions Board should have power to appoint trustees and authorise an administrator to carry out wind-up processes 13

17. Conclusion  Solution to many of the problems faced by pension schemes is to:  create strong and effective governance and  administration that:  will enable trustees to minimise risk, and  maximise value in their schemes  Next steps: 2008 Social Welfare and Pensions Act 14

18. Last Thought  Despite the mounting pressures in trustee responsibilities, 82% of (UK) trustees would take the role again knowing what they know now (Economist survey April 2007) 16

19. Further information www.pensionsboard.ie News by email function Trusteeship review Trustee Handbook Codes of Practice Guidance Notes – available on request

20. Thank you…… Questions ?