To ask the Minister for Social Protection the position regarding the implementation of the recommendations for the Report on Pension Charges 2012; and if she will make a statement on the matter?
Reply
The Report on Pension Charges, published in October 2012, was undertaken by my Department, working with the Central Bank and the Pensions Authority, and with support from PWC and was the first comprehensive Government report on this subject. The purpose of the report was to gather information on pension charges levied to assess whether charges are reasonable and transparent, and make recommendations. The report highlighted a wide range of issues in relation to pension charges and identified a number of problems. While the provision of pension schemes cannot be cost free, it is clear that there are major challenges to be addressed in the two main areas of reasonableness and transparency of charges.
Following the Report’s publication and a consultation with stakeholders, it was agreed by Government in April 2013 that the recommendations contained in the report would be implemented. A group comprising the Department of Social Protection, the Pensions Authority and the Central Bank is in place to initiate actions that follow up on these recommendations. Each has a core role to play in delivering on the recommendations contained in the report and work is progressing in this regard.
In line with the report’s recommendation to monitor the implementation of the Consumer Protection Code, the Central Bank recently published findings of a review of annual pension statements. This review found the vast majority of firms were in compliance with the code. Where the Bank identified a small number of firms where the format of annual statements were not as required, the firms concerned were required to submit implementation timelines for full compliance.
Work is also ongoing in relation to other recommendations of the report such as consideration of a single standard measure that would assess all charges as well as investigation of the drivers behind take up of PRSAs.
In parallel, my Department is involved in complementary EU negotiations in relation to a review of the IORPs (Institutions for Occupational Retirement Provision) Directive which lays down basic requirements for occupational pensions and their supervision. It is anticipated that agreement would result in improvements for consumers in the areas of member information regarding charges, trustee competencies, scheme governance and risk management.
In addition, progress on the issue of charges will be supported by recent actions to restructure the Pensions Authority and strengthen governance and regulation and give consumer representatives a greater input into pensions policy. I have previously highlighted that the first task of the new Pensions Council will be to monitor the implementation of the recommendations in the Report on Pension Charges and advise if further actions are needed.