S.I. No. 128/2021 - European Union (Occupational Pension Schemes) Regulations 2021

Notice of the making of this Statutory Instrument was published in

“Iris Oifigiúil” of 30th April, 2021.

I, HEATHER HUMPHREYS, Minister for Social Protection, in exercise of the powers conferred on me by section 3 of the European Communities Act 1972 (No. 27 of 1972) and for the purpose of giving effect to Directive (EU) 2016/2341 of the European Parliament and of the Council of 14 December 2016¹ , hereby make the following regulations:

Part 1 Preliminary and General

Citation

1.

Interpretation

2.

“Directive” means Directive (EU) 2016/2341 of the European Parliament and of the Council of 14 December 2016¹ ;

“enactment” has the meaning assigned to it by the Interpretation Act 2005 (No. 2005);

“Principal Act” means the Pensions Act 1990 (No. 25 of 1990).

• (2) A word or expression that is used in these Regulations (or in any enactment amended by these Regulations) and is also used in the Directive shall, unless the context otherwise requires, have the same meaning in these Regulations (or that enactment) as it has in the Directive.

Application of Regulations

3.

Part 2 Amendment of Principal Act

Amendment of section 2 of Principal Act

4.

• (a) the insertion of the following definitions:

“ ‘competent authority’ means –

• (a) in relation to the State, the Pensions Authority, and

• (b) in relation to another Member State, the competent authority designated by that Member State to perform the functions of the competent authority under the Directive of 2016 for that Member State;

‘Directive of 2016’ means Directive (EU) 2016/2341¹ of the European Parliament and of the Council of 14 December 2016 on the activities and supervision of institutions for occupational retirement provision (IORPs) (recast);

‘EIOPA’ means the European Insurance and Occupational Pensions Authority established by Regulation (EU) No. 1094/2010 of the European Parliament and of the Council² ;

‘enactment’ has the same meaning as it has in the Interpretation Act 2005 ;”

‘External Report’ shall be construed in accordance with section 26N;

‘External Report reviewer’ shall be construed in accordance with section 26O;

‘key function holder’ has the meaning assigned to it by section 64AA;

‘prudential supervision’ shall be construed in accordance with Part IIA;”,

• (b) by the substitution of the following definition for the definition of “Member State”:

“ ‘Member State’ means –

• (a) a Member State of the European Union, other than the State, and

• (b) not being such a Member State, a state which is a contracting party to the Agreement on the European Economic Area signed at Oporto on 2 May 1992 as adjusted by the Protocol signed at Brussels on 17 March 1993;”,

• (c) by the substitution of the following definition for the definition of “one-member arrangement”:

“ ‘one-member arrangement’ means –

• (a) a scheme which is established solely for one person and for that person permanently to be the sole member and that member has discretion in respect of the manner in which the resources of that scheme are invested,

• (b) a trust RAC which is established solely for one person and for that person permanently to the sole member and that member has discretion in respect of the manner in which the resources of that trust RAC are invested, or

• (c) a scheme referred to in paragraph (a) or a trust RAC referred to in paragraph (b) which is the subject of a pension adjustment order and which, pursuant to that order, includes, in addition to the member referred to in paragraph (a), or as the case may be paragraph (b), a person referred to in that order;”, and

• (d) in the definition of “outsourcing arrangement”, by substituting “shall, other than in Parts VIB and IIA, be construed accordingly” for “shall be construed accordingly”.

• (2) Section 2 of the Principal Act is amended by the insertion of the following subsections after subsection (5):

• “(6) A reference to the Directive or a reference to any Article or sub-Article of that Directive shall be construed as a reference to the Directive of 2016 and shall be read in accordance with the correlation table in Annex II of that Directive (EU).

• (7) A word or expression that is used in this Act as amended by the European Union (Occupational Pension Schemes) Regulations 2021 has, unless the contrary intention appears, the same meaning in this Act as so amended, as it has in the Directive of 2016.

• (8) References in this Act to the provision of information by a trustee to a member or a beneficiary shall, unless otherwise specified in another Part or section of this Act, be construed as including references to the provision of the information to a member or a beneficiary by means of any electronic method.”.

Amendment of section 3 of Principal Act

5.

• (a) in subsection (1) by the insertion of the following paragraph after paragraph (c):

• “(ca) In a prosecution for an offence under paragraph (a) insofar as it relates to a contravention of a provision of Part VIB, it shall be a defence for a trustee of a scheme or trust RAC or a person who is, or was, a key function holder against whom the proceedings are brought to prove that he or she took all reasonable steps and exercised all due diligence to avoid the commission of the offence.”, and

• (b) by the insertion of the following new subsection after subsection (3A):

• “(3B) A person who obstructs or impedes an External Report reviewer in the preparation of an External Report shall be guilty of an offence.”.

Amendment of section 3A of Principal Act

6.

Amendment of section 10 of Principal Act

7.

• (a) in subsection (1) by the insertion of the following paragraphs after paragraph (fa):

• “(fb) to be the competent authority in the State for the purposes of the Directive of 2016,

• (fc) for the purposes of paragraph (fb), to perform the functions of the competent authority in the State for the purposes of the Directive of 2016,”, and

• (b) by the insertion of the following subsection after subsection (1):

• “(1A) Without prejudice to subsection (1), the Pensions Authority shall carry out the prudential supervision under Part IIA in order to protect the rights of members and beneficiaries, and ensure the stability and soundness, of schemes and trust RACs.”.

Amendment of section 18 of Principal Act

8.

• (a) in subsection (3) by the insertion of “or section 26V(8)” after “by this section”, and

• (b) in subsection (6), by the insertion of the following paragraph after paragraph (a):

• “(aa) in relation to a scheme or trust RAC, any person who –

  • (i) is a key function holder, or

  • (ii) is a service provider referred to in section 64AM and who has entered into an arrangement referred to in that section,

  for that scheme or trust RAC,”.

Part 3

Chapter 1 Small scheme and one-member arrangements

Amendment of section 53F of Principal Act

9.

• (a) the designation of the section as subsection (1),

• (b) the deletion of paragraph (d), and

• (c) the insertion of the following subsection after subsection (1):

• “(2) Notwithstanding the amendment of this section by the European Union (Occupational Pension Schemes) Regulations 2021 ( S.I. No. 128 of 2021 ), as respects a one-member arrangement established before the coming into operation of those Regulations, the provisions of this section shall only on and from the expiry of 5 years from the date of the coming into operation of those Regulations apply to such one-member arrangement.”.

Amendment of section 54 of Principal Act

10.

• (a) the deletion of subsection (7), and

• (b) the insertion of the following subsection after subsection (7):

• “(8) Notwithstanding the amendment of this section by the European Union (Occupational Pension Schemes) Regulations 2021, a small trust RAC to which subsection (7) applied immediately before the coming into operation of those Regulations shall comply with this section not later than 31 December 2021.”.

Amendment of section 55 of Principal Act

11.

• (a) in subsection (1A), by the deletion of “(other than a one-member arrangement or a small trust RAC which is not a regulatory own funds trust RAC)”,

• (b) in subsection (2), by the deletion of paragraph (d), and

• (c) by the insertion, after subsection (7), of the following subsection:

• “(8) Notwithstanding the amendment of this section by the European Union (Occupational Pension Schemes) Regulations 2021 –

  • (a) a small trust RAC to which the exemption in subsection (1A) applied before the day on which those Regulations come into operation, shall make the appointment referred to in subsection (1A) not later than 31 December 2021,

  • (b) a one-member arrangement to which the exemption in subsection (1A) applied before the day on which those Regulations come into operation, this section shall only on and from the expiry of 5 years from the date of such coming into operation, apply to such one-member arrangement, and

  • (c) for the purposes of the preparation of the first annual report following the coming into operation of those Regulations –

    • (i) in the case of a small trust RAC referred to in paragraph (a), the first annual report shall be prepared in respect of a year specified in paragraph (a), (b) or (c) of subsection (1) which falls after the expiration 31 December 2021, and

    • (ii) in the case of a one-member arrangement referred to in paragraph (b), the first annual report shall be prepared in respect of a year specified in paragraph (a), (b) or (c) of subsection (1) which falls after the expiration of the 5 year period referred to in paragraph (b).”.

Amendment of section 56 of Principal Act

12.

Amendment of section 58 of Principal Act

13.

Amendment of section 59 of Principal Act

14.

• (a) in subsection (1), in paragraph (f), by the deletion of “other than in the case of the trustees of a small trust RAC,”, and

• (b) by the insertion of the following subsection after subsection (4):

• “(5) Notwithstanding the amendment of this section by the European Union (Occupational Pension Schemes) Regulations 2021, the trustees of a small trust RAC established before the coming into operation of those Regulations shall comply with section 59(1)(f) not later than 31 December 2021.”.

Amendment of section 61B of Principal Act

15.

• “(3) This section shall not apply in respect of borrowing arrangements entered into by the trustees of a one-member arrangement before the coming into operation of the European Union (Occupational Pension Schemes) Regulations 2021.”.

Amendment of section 64D of Principal Act

16.

Chapter 2 Amendment of Part XII of Principal Act

Amendment of section 148 of Principal Act

17.

• (a) the insertion of the following definitions:

“ ‘cross-border activity’ means operating a scheme or trust RAC where the relationship between the sponsoring undertaking, and the members and beneficiaries concerned, is governed by the social and labour law of a Member State other than the State;

‘main administration’, without prejudice to section 2(7), shall be construed in accordance with the Directive of 2016;

‘receiving IORP’ means an IORP, within the meaning of the Directive of 2016, registered or authorised in a Member State other than the State, receiving all or part of a scheme or trust RAC’s liabilities, technical provisions and other obligations and rights, as well as corresponding assets or cash equivalent thereof, from a scheme or trust RAC registered in the State;

‘receiving scheme or trust RAC’ means a scheme or trust RAC which receives or seeks to receive all or part of a pension scheme’s liabilities, technical provisions and other obligations and rights, as well as corresponding assets or cash equivalent thereof, from a transferring IORP (within the meaning of the Directive of 2016) registered or authorised in a Member State other than the State;

‘transferring IORP’ means an IORP (within the meaning of the Directive of 2016) registered or authorised in a Member State other than the State, transferring all or part of a pension scheme’s liabilities, technical provisions and other obligations and rights, as well as corresponding assets or cash equivalent thereof, to a receiving scheme or trust RAC;

‘transferring scheme or trust RAC’ means a scheme or trust RAC transferring all or part of its liabilities, technical provisions and other obligations and rights, as well as corresponding assets or cash equivalent thereof, to a receiving IORP;”,

• (b) the substitution of the following definition for the definition of “social and labour law”:

“ ‘social and labour law’, in relation to a Member State, means the social and labour law (within the meaning of Article 11 of the Directive of 2016) of that Member State relevant to occupational pension schemes (within the meaning of that Article);”;

• (c) the substitution of the following definition for the definition of “undertaking”:

“ ‘undertaking’, in relation to a scheme or trust RAC, means a sponsoring undertaking (within the meaning of the Directive of 2016) whose relationship with its members and beneficiaries is governed by the social and labour law of another Member State, which makes, or proposes to make, contributions to the scheme or trust RAC;”, and

• (d) the insertion of the following subsection after subsection (2):

• “(3) Without prejudice to section 2(7), a word or expression that is used in this Part and is also used in the Directive of 2016 shall, unless the context otherwise requires, have the same meaning in this Part as it has in the Directive.”.

Service of documents for purpose of Part

18.

“148A. (1) A notice or other document that is required to be given, or sent, to, or served on, a person under this Part shall be addressed to the person by name and shall be given, sent or served to the person in one of the following ways:

• (a) by delivering it to the person;

• (b) by leaving it at the address at which the person ordinarily resides or carries on business or, in a case in which an address for service has been furnished, to that address;

• (c) by sending it by post in a pre-paid registered letter or by any other form of recorded delivery to the address at which the person ordinarily resides or carries on business, or in a case in which an address for service has been furnished, to that address;

• (d) by electronic means, in a case in which the person has given notice in writing to the person serving or giving the notice or document concerned of his or her consent to the notice or document (or notices or documents of a class to which the notice or document belongs) being served on, or given or issues to, him or her in that manner.

• (2) For the purposes of subsection (1), a company within the meaning of the Companies Acts or the Companies Act 2014 , shall be deemed to be ordinarily resident at its registered office, and every other body corporate and every unincorporated body shall be deemed to be ordinarily resident at its principal office or place of business.”.

Amendment of section 149 of Principal Act

19.

• (a) in subsection (1), by the substitution of the following subsection for subsection (1):

• “(1) The trustees of a scheme or trust RAC shall not accept any contributions to a scheme or trust RAC from an undertaking unless –

  • (a) in respect of the scheme or trust RAC concerned –

    • (i) the trustees are authorised by the Pensions Authority under this section, and

    • (ii) approval has been granted, or deemed to have been granted, under section 151 in relation to the undertaking concerned, or

  • (b) in the case of a scheme or trust RAC which is a receiving scheme or trust RAC referred to in section 151A(13) –

    • (i) the trustees of that scheme or trust RAC are deemed, under section 151A(13)(a), to be authorised under this section, and

    • (ii) approval in respect of section 151 has been deemed, under section 151A(13)(b), to have been granted in relation to the undertaking concerned.”, and

• (b) by the insertion of the following subsections after subsection (6):

• “(7) Where the Pensions Authority is not satisfied that –

  • (a) the trustees of the scheme or trust RAC, or

  • (b) the scheme or trust RAC,

  comply, or complies, with the conditions of authorisation under subsection (4), it shall refuse authorisation under this section and shall notify the trustees of the scheme or trust RAC, in writing, of that decision and of the right of appeal within the period referred to in subsection (8).

• (8) Where the Pensions Authority has refused to make an authorisation under this section, the trustees of the scheme or trust RAC may, not later than 21 days from the date of the notification, referred to in subsection (7), of that decision appeal to the High Court against that decision to refuse authorisation under this section.

• (9) On the hearing of an appeal referred to in subsection (8), the High Court may make one of the following orders –

  • (a) an order confirming the decision to refuse authorisation, or

  • (b) an order quashing the decision to refuse authorisation.

• (10) The Court may also make such ancillary orders as it considers appropriate.”.

Amendment of section 150 of Principal Act

20.

Amendment of section 151 of Principal Act

21.

• (a) in subsection (2) –

• (i) in paragraph (a), by the insertion of “main administration of the sponsoring” after “location of the”, and

• (ii) in paragraph (b), by the substitution of “the host Member State which shall, where applicable, be identified by the sponsoring undertaking” for “any host Member State”,

• (b) by the substitution of the following subsection for subsection (4):

• “(4) The Pensions Authority shall assess the administrative structure, the financial situation of the scheme or trust RAC and the trustees compliance with the requirements specified in section 59A and where it is of the opinion that such administrative structure, such financial situation and such trustee compliance are compatible with the proposed cross-border activity, the Pensions Authority shall, within 3 months after the date of receipt of the notification under subsection (1), notify in writing –

  • (a) the competent authority of the host Member State of any relevant information contained in the notification, and

  • (b) the trustees of the scheme or trust RAC that approval has been granted by it in relation to the undertaking specified in the notification.”,

• (c) by the insertion of the following subsections after subsection (4):

• “(4A) Where the Pensions Authority decides not to grant approval under subsection (4), the Pensions Authority shall, within 3 months of the date of the receipt of the notification under subsection (1), issue a decision in writing to the trustees of the scheme or the trust RAC with the reasons for this decision.

• (4B) Where –

  • (a) the Pensions Authority has issued a decision under subsection (4A), the trustees of the scheme or trust RAC may within 21 days after the date of issue of the decision under subsection (4A), appeal to the High Court against the decision of the Pensions Authority, or

  • (b) the Pensions Authority has not communicated the relevant information contained in the notification under subsection (1) to the competent authority of the host Member State within 3 months from the date of the receipt by it of that notification, the trustees of the scheme or trust RAC may within 21 days of the expiry of that 3 month period, appeal to the High Court against the failure of the Pensions Authority to act.”,

• (d) by the substitution of the following subsection for subsection (5):

• “(5) If no notification is received from the Pensions Authority under subsection (4) within the period specified in that subsection or as the case may be, subsection (4A) within the period specified in that subsection, approval is deemed to have been granted in relation to the undertaking specified in the notification under subsection (1) at the end of that period.”,

• (e) by the substitution of the following subsection for subsection (6):

• “(6) Where the Pensions Authority has notified the competent authority of the host Member State under subsection (4)(a) and that competent authority notifies the Pensions Authority of –

  • (a) pursuant to paragraph 7 of Article 11 of the Directive of 2016 –

    • (i) the requirements of social and labour law, and

    • (ii) the information requirements referred to in Title IV of the Directive of 2016,

    of the host Member State which apply to the cross-border activity, and

  • (b) pursuant to Article 33 of the Directive of 2016, a requirement, if any, under the law of the host Member State to appoint one or more depositaries for the safekeeping of assets and oversight duties,

  the Pensions Authority shall, as soon as reasonably practicable following receipt of such notification, by that competent authority, of the matters specified in paragraphs (a) and (b), notify the trustees of the scheme or trust RAC concerned of those matters.”,

• (f) by the insertion of the following subsections after subsection (6):

• “(6A) Where the competent authority of the host Member State referred to in subsection (6), informs the Pensions Authority, pursuant to paragraph 9 of Article 11 of the Directive of 2016, of significant changes to –

  • (a) the requirements referred to in subsection (6)(a) which may affect the characteristics of the scheme or trust RAC concerned insofar as it concerns the cross-border activity, or

  • (b) where the requirements referred to in subsection (6)(b) apply, those requirements,

  the Pensions Authority shall, as soon as reasonably practicable following receipt of such changes, notify the trustees of the scheme or trust RAC of those changes.”, and

• (g) in subsection (7)(a) by the substitution of “6 weeks” for “2 months” in each place where it occurs.

Insertion of new sections 151A and 151B

22.

“Transfer from IORP in another Member State to receiving scheme or trust RAC

151A. (1) The trustees of a scheme or trust RAC may, in accordance with this section, receive all or part of a pension scheme’s liabilities, technical provisions and other obligations and rights as well as corresponding assets or cash equivalent thereof, from a transferring IORP.

• (2) The trustees of a receiving scheme or trust RAC seeking to receive a transfer from a transferring IORP shall submit an application for authorisation of a transfer to the Pensions Authority.

• (3) An application under subsection (2) shall include the following information:

  • (a) the written agreement between the transferring IORP and the trustees of the receiving scheme or trust RAC setting out the conditions of the transfer;

  • (b) a description of the main characteristics of the transferring IORP’s pension scheme;

  • (c) a description of the liabilities or technical provisions to be transferred, and other obligations and rights, as well as corresponding assets or cash equivalent thereof;

  • (d) the name and the location of the main administration of the transferring IORP and the Member State in which it is registered or authorised;

  • (e) the name and the location of the main administration of the receiving scheme or trust RAC and the Member State in which it is registered or authorised;

  • (f) the location of the main administration of the sponsoring undertaking and the name of the sponsoring undertaking;

  • (g) evidence that the transfer has been approved by a majority of the members and a majority of the beneficiaries of the pension scheme of the transferring IORP or their representatives in compliance with the requirements of the national law of the Member State concerned, and, where applicable, the approval of the sponsoring undertaking;

  • (h) where the transfer results in cross-border activity, the name of the Member State whose social and labour law is applicable to the members and beneficiaries concerned.

• (4) The Pensions Authority may request the trustees to provide further information in relation to any of the matters specified in paragraphs (a) to (h) of subsection (3).

• (5) On receipt of the information under subsection (3), the Pensions Authority shall, as soon as practicable and not later than 7 days, send a copy of that information to the competent authority of the transferring IORP.

• (6) The trustees of a receiving scheme or trust RAC shall not accept a transfer of all or part of a pension scheme’s liabilities, technical provisions, and other obligations and rights, as well as corresponding assets or cash equivalent thereof, from a transferring IORP unless –

  • (a) the transfer is authorised by the Pensions Authority under this section, and

  • (b) the prior consent of the competent authority of the transferring IORP has been obtained.

• (7) The Pensions Authority shall assess whether –

  • (a) all of the information referred to in paragraphs (a) to (h) of subsection (3) has been provided to it by the receiving scheme or trust RAC,

  • (b) the administrative structure, the financial situation of the receiving scheme or trust RAC and the trustees’ compliance with section 59A are compatible with the proposed transfer,

  • (c) the long term interests of the members and beneficiaries of the receiving scheme or trust RAC, and the transferred part of the transferring IORP pension scheme, are adequately protected during and after the transfer,

  • (d) where the transfer results in cross-border activity, the technical provisions of the receiving scheme or trust RAC are fully funded at the date of the transfer, and

  • (e) the assets to be transferred are sufficient and appropriate in accordance with the provisions of this Act to cover the liabilities, technical provisions and other obligations and rights to be transferred,

  and where the Pensions Authority is satisfied that the matters referred to in paragraphs (a) to (e) have been complied with, the Pensions Authority shall authorise the transfer of the pension scheme’s liabilities, technical provisions and other obligations and rights, as well as corresponding assets or cash equivalent thereof, from the transferring IORP to the receiving scheme or trust RAC.

• (8) The Pensions Authority shall send a notification of the authorisation in writing to –

  • (a) the trustees of the receiving scheme or trust RAC, within 3 months of receiving the application referred to in subsection (2), and

  • (b) the competent authority of the transferring IORP, within 2 weeks of the date of granting the authorisation under this section.

• (9) Where the Pensions Authority is not satisfied that any of the matters referred to in paragraphs (a) to (e) of subsection (7) have been complied with, it shall refuse to authorise the transfer and shall –

  • (a) send, to the trustees of the receiving scheme or trust RAC, a notification in writing of –

    • (i) the refusal, and

    • (ii) the reasoning for that refusal,

    within 3 months of the date of the receipt of the application under subsection (2), and

  • (b) send a notification in writing of the refusal to the competent authority of the transferring IORP within 2 weeks of the date of the refusal of the authorisation under this subsection.

• (10) Where –

  • (a) the Pension Authority refuses to authorise the transfer to the receiving scheme or trust RAC under subsection (9), or

  • (b) the Pension Authority fails to act within the 3 month period referred to in subsection (8)(a),

  the trustees of the receiving scheme or trust RAC may appeal to the High Court in the case of a refusal to authorise the transfer referred to in paragraph (a), within 21 days from the date on which the Pensions Authority notifies the trustees of its refusal under subsection (9), or in the case of a failure to act referred to in paragraph (b), the expiry of the 3 month period referred to in subsection (8)(a).

• (11) On the hearing of an appeal referred to in subsection (10), the High Court may make –

  • (a) an order confirming the refusal to authorise the transfer referred to in subsection (10)(a) or confirming that the Pension Authority has failed to act within the period referred to in subsection (10)(b), or

  • (b) an order quashing the refusal to authorise the transfer referred to in subsection (10)(a),

  and may make such ancillary orders as it considers appropriate.

• (12) Where the Pensions Authority has authorised a transfer under subsection (7) and the transfer results in cross-border activity and the competent authority of the home Member State of the transferring IORP notifies the Pensions Authority of –

  • (a) pursuant to Article 12(11) of the Directive of 2016 –

    • (i) the requirements of social and labour law, and

    • (ii) the information requirements referred to in Title IV of the Directive of 2016,

    of the home Member State of the transferring IORP which will apply to the cross-border activity, and

  • (b) pursuant to Article 33(1) of the Directive of 2016, a requirement, if any, under the law of the home Member State of the transferring IORP to appoint one or more depositaries for the safekeeping of assets and oversight duties,

  the Pensions Authority shall within one week of receipt of such notification, by that competent authority, of the matters specified in paragraphs (a) and (b), notify the trustees of the receiving scheme or trust RAC of those matters.

• (13) Where, in accordance with subsection (7), the Pensions Authority has authorised the transfer of a pension scheme’s liabilities, technical provisions, other obligations, rights, any assets, or cash equivalent referred to in subsection (7) from a transferring IORP to a receiving scheme or trust RAC and the transfer results in cross-border activity, the trustees of the receiving scheme or trust RAC concerned shall be deemed –

  • (a) to be authorised under section 149 for cross-border activity, and

  • (b) to have been granted approval under section 151 to accept contributions from the undertaking to which the transfer relates, and sections 149(4), 150 and 152 shall apply in respect of that scheme or trust RAC.

• (14) The trustees of the receiving scheme or trust RAC may effect the transfer and begin to operate the scheme or trust RAC where –

  • (a) a transfer is authorised under subsection (7), on receipt of the notification referred to in subsection (8)(a), or

  • (b) no information on the decision is received from the Pensions Authority by the trustees of the receiving scheme or trust RAC on the expiry of the period referred to in subsection (12), at the expiry of the period.

• (15) In the case of a disagreement about the procedure or content of an action or inaction of the Pensions Authority or the competent authority of the transferring IORP, including a decision to refuse a cross-border transfer, the Pensions Authority may request EIOPA to carry out non-binding mediation in accordance with point (c) of the second paragraph of Article 31 of Regulation (EU) No. 1094/2010.

• (16) The trustees of the receiving scheme or trust RAC shall ensure that the costs of the transfer under this section shall not be borne by the incumbent members and beneficiaries of the scheme or trust RAC.

• (17) In the case of the trustees of a small scheme or small trust RAC deemed, under subsection 13(a), to be authorised under section 149 for cross-border activity, the trustees of that small scheme or small trust RAC shall comply with the provisions of this Act that are prescribed from time to time for the purposes of section 149.

Transfers from scheme or trust RAC to IORP in another Member State

151B. (1) The trustees of a scheme or trust RAC may, in accordance with this section, transfer all or part of the liabilities, technical provisions and other obligations and rights as well as corresponding assets or cash equivalent thereof, of that scheme or trust RAC to a receiving IORP.

• (2) The trustees of a transferring scheme or trust RAC who intend to transfer all or part of a scheme’s, or trust RAC’s, liabilities, technical provisions and other obligations and rights, as well as corresponding assets or cash equivalent thereof, to a receiving IORP shall not make that transfer unless the trustees have obtained the prior approval to the transfer by –

  • (a) a majority of –

    • (i) the members, and

    • (ii) the beneficiaries,

    of that scheme or trust RAC, and

  • (b) the sponsoring undertaking, where applicable.

• (3) The trustees referred to in subsection (2) shall, for the purpose of obtaining the prior approval referred to in subsection (2) –

  • (a) notify, in writing, the members and beneficiaries of the transferring scheme or trust RAC of the intention to transfer, and

  • (b) provide information in that notification concerning the conditions of the transfer.

• (4) A transfer referred to in subsection (1) shall require –

  • (a) the prior consent of the Pensions Authority, and

  • (b) when the prior consent referred to in paragraph (a) has been obtained, the authorisation of the competent authority of the receiving IORP.

• (5) Where the Pensions Authority receives an application for authorisation under this section of a transfer from the competent authority of the receiving IORP, the Pensions Authority shall assess whether –

  • (a) in the case of a partial transfer of the scheme’s or trust RAC’s liabilities, technical provisions, and other obligations and rights, as well as corresponding assets or cash equivalent thereof, the long term interests of the members and beneficiaries of the remaining part of the transferring scheme or trust RAC are adequately protected,

  • (b) the individual entitlements of the members and beneficiaries are at least the same after the transfer, and

  • (c) the assets corresponding to the scheme or trust RAC to be transferred are, in accordance with this Act, sufficient and appropriate to cover the liabilities, technical provisions and other obligations and rights to be transferred.

• (6) Where the Pensions Authority is satisfied of the matters set out in paragraphs (a) to (c) of subsection (5), it shall, within 8 weeks of the date of receipt of the application for authorisation of a transfer from the competent authority of the receiving IORP, communicate to that competent authority that it consents to the transfer.

• (7) Where the Pensions Authority is not satisfied of any of the matters set out in paragraphs (a) to (c) of subsection (5), it shall, within 8 weeks of the date of receipt of the application for authorisation of a transfer from the competent authority of the receiving IORP, communicate to that competent authority that it does not consent to the transfer.

• (8) Where the Pensions Authority receives a notification pursuant to Article 12(11) of the Directive of 2016 from the competent authority of a receiving IORP and the transfer results in cross-border activity, the Pensions Authority shall inform the competent authority of the receiving IORP of the relevant statutory requirements within 4 weeks from the date of receipt of that notification.

• (9) Where a transfer authorised by the competent authority of the receiving IORP results in cross-border activity, section 153(3) to (7) shall apply in respect of the supervision by the Pensions Authority of the receiving IORP within the State.

• (10) In the case of a disagreement about the procedure or content of an action or inaction of the Pensions Authority or the competent authority of the receiving IORP, including a decision to authorise or refuse a cross-border transfer, the Pensions Authority may request EIOPA to carry out non-binding mediation in accordance with point (c) of the second paragraph of Article 31 of Regulation (EU) No. 1094/2010.

• (11) The trustees of the transferring scheme or trust RAC shall ensure that the costs of the transfer under this section shall not be borne by the remaining members and beneficiaries of the scheme or trust RAC.”.

Amendment of section 152 of Principal Act

23.

• (a) in subsection (1) –

• (i) by the deletion of “, investment”, and

• (ii) by the insertion of “and a requirement, if any, under the law of any relevant Member State to appoint a depositary” after “host Member State”, and

• (b) in subsection (2) by the substitution of the following for paragraph (a):

• “(a) the competent authority of the host Member State, in pursuance of Article 11(10) of the Directive of 2016, inform the Pensions Authority that the trustees of the scheme or trust RAC are operating the scheme or trust RAC in a manner which is not consistent with –

  • (i) the requirements of social and labour law,

  • (ii) the information requirements, referred to in Title IV of the Directive of 2016, or

  • (iii) a requirement, if any, to appoint a depositary under the law,

  of that host Member State, or”.

Amendment of section 153 of Principal Act

24.

• (a) by the substitution of the following subsection for subsection (1):

• “(1) Where –

  • (a) an employer or self-employed person makes or proposes to make contributions to an institution for occupational retirement provision that has its main administration in another Member State, and

  • (b) the relationship between the employer and the members and beneficiaries concerned is governed by the social and labour law of the State,

  any function which Article 11 of the Directive of 2016 requires or authorises to be exercised by the competent authorities of the State is exercisable by the Pensions Authority.”, and

• (b) in subsection (2) by –

• (i) the substitution of “Article 11(4) of the Directive of 2016” for “Article 20(4) of the Directive”, and

• (ii) the substitution of “6 weeks” for “2 months”.

Part 4

Chapter 1 Quantitative requirements

Amendment of section 59 of Principal Act

25.

• (a) in subsection (1), in paragraph (b), by the substitution of “in accordance with section 59AB and, subject to that section,” for “in accordance with regulations and, subject to those regulations”,

• (b) by the deletion of subsection (1A),

• (c) in subsection (1B) –

• (i) by the deletion of “, other than a small scheme or small trust RAC as the case may be,”, and

• (ii) in paragraph (c), by the insertion of “significant” after “following any”, and

• (d) by the insertion of the following subsections after subsection (1C):

• “(1D) A member or a beneficiary, or the Pensions Authority, may request a copy of the statement referred to in subsection (1B).

• (1E) The trustees of a scheme or trust RAC shall make the statement referred to in subsection (1B) available on request and without prejudice to the generality of the foregoing, following a request under subsection (1D), shall provide that statement –

  • (a) in the case of a request by a member or beneficiary, not later than 4 weeks from the date on which the request was made, or

  • (b) in the case of a request made by the Pensions Authority, within such time as the Pensions Authority may specify.”.

Investment rules

26.

“59AB. (1) The trustees of a scheme or trust RAC shall invest in accordance with the prudent person rule (within the meaning of the Directive of 2016) and without prejudice to the generality of the foregoing shall invest in accordance with this section.

• (2) When investing, the trustees of a scheme or trust RAC –

  • (a) shall invest the resources of the scheme or trust RAC in the best long term interests of members and beneficiaries as a whole, and in the case of a potential conflict of interest, shall ensure that the investment is made in the sole interest of members and beneficiaries,

  • (b) in accordance with the prudent person rule referred to in subsection (1), may take into account the potential long-term impact of investment decisions on environmental, social and governance factors,

  • (c) shall invest the resources of the scheme or trust RAC in such a manner as to ensure the security, quality, liquidity and profitability of the portfolio as a whole,

  • (d) shall invest the resources of the scheme or trust RAC predominantly in regulated markets and, where there is investment in assets which are not admitted to trading on a regulated financial market, shall keep any such investment to prudent levels,

  • (e) shall comply with subsection (3) if investing in derivative instruments,

  • (f) shall invest in such a manner that the resources shall be properly diversified in such a way as to avoid excessive reliance on any particular asset, issuer or group of undertakings and accumulations of risk in the portfolio as a whole,

  • (g) for the purposes of paragraph (f), where they invest in assets issued by the same issuer or by issuers belonging to the same group, shall invest in a manner that shall not expose the scheme or trust RAC to excessive risk concentration,

  • (h) if they have invested in the employer, shall not invest more than 5% of the resources of the scheme as a whole and, where the employer belongs to a group, they shall not invest more than 10% of those resources in the undertakings belonging to the same group as the employer, and

  • (i) for the purposes of paragraph (h), shall, where a scheme is sponsored by a number of employers, invest in those employers prudently and shall take into account the need for proper diversification.

• (3) In the case of investment in derivative instruments referred to in subsection (2)(e) and for the purposes, by the trustees of a scheme or trust RAC, of such investment, such investment by trustees of a scheme or trust RAC shall be possible insofar as such instruments contribute to a reduction in investment risks or facilitate efficient portfolio management and –

  • (a) they shall be valued on a prudent basis, taking into account the underlying asset,

  • (b) they shall be included in the valuation of the assets of the scheme or trust RAC, and

  • (c) the trustees shall avoid excessive risk exposure to a single counterparty and to other derivative operations.

• (4) The Pensions Authority shall –

  • (a) monitor the adequacy of the credit assessment processes of schemes, and

  • (b) assess the use of references to credit ratings issued by credit rating agencies as defined in point (b) of Article 3(1) of Regulation (EC) No. 1060/2009 of the European Parliament and of the Council³ , in their investment policies and, where appropriate encourage mitigation of the impact of such references, with a view to reducing sole and mechanistic reliance on such credit ratings.

• (5) For the purposes of subsection (2) –

  • (a) investment in a collective investment undertaking shall be treated as being invested in a regulated market in accordance with subsection (2)(d) and diversified in accordance with subsection (2)(f) to the extent that the investments held by that undertaking are themselves so invested,

  • (b) investment in an insurance policy falling within the class of insurance specified at paragraph III of Annex II of Directive 2009/138/EC of the European Parliament and of the Council⁴ shall be treated as invested on a regulated market in accordance with subsection (2)(d) and diversified in accordance with subsection (2)(f) to the extent that the selection, by the trustees referred to in subsection (2), of the investments by which the return on the insurance policy will be determined complies with those subsections,

  • (c) investment in an insurance policy the terms of which provide that the proceeds of the insurance policy at maturity will be equal to or greater than the amount of the investment over the term of the insurance policy, shall be treated as invested on a regulated market in accordance with subsection (2)(d) and diversified in accordance with subsection (2)(f),

  • (d) investment in an insurance policy of a type to which Article 2(3)(a)(ii) of Directive 2009/138/EC of the European Parliament and of the Council relates shall be treated as invested on a regulated market in accordance with subsection (2)(d) and diversified in accordance with subsection (2)(f), and

  • (e) investment in bonds issued by the government of any Member State shall be treated as diversified in accordance with subsection (2)(f).

• (6) Subsection (2)(d) applies in respect of the proportion of the assets of the scheme or trust RAC attributable to each individual member of the scheme or trust RAC in the same manner as they apply to the assets of the scheme or trust RAC as a whole.

• (7) For the purposes of subsection (4) and the monitoring by the Pensions Authority referred to in that subsection, the trustees of a scheme shall –

  • (a) notify the Pensions Authority, in such form as the Pensions Authority may specify, where all or part of the resources of the scheme are directly invested in debt instruments, excluding investments in collective investment undertakings and investments in an insurance policy, and

  • (b) on request by the Pensions Authority, furnish it with all relevant information on the credit assessment process applied by a scheme.

• (8) For the purposes of subsection (2)(h) and (2)(i) and subject to subsection (9), in the case of a scheme investment of all or part of the resources of the scheme in the employer or, where the employer belongs to a group, that group, such investment –

  • (a) shall be deemed to include investment in –

    • (i) property, other than land or buildings, which is used for the purpose of any business carried on by the employer, or as the case may be, that group,

    • (ii) loans to the employer or as the case may be, that group,

    • (iii) moneys due to the scheme held by the employer or as the case may be, that group, or

    • (iv) shares or other securities issued by a person in that group, and

  • (b) shall not include –

    • (i) investment in a cash deposit with any person in that group who, in accordance with, or pursuant to, any enactment, is an authorised deposit taking institution, or

    • (ii) investment in –

      • (I) an insurance policy or contract of assurance issued by a person in that group who is the holder of an authorisation within the meaning of Article 2 of the European Communities (Life Assurance) Framework Regulations 1994 ( S.I. No. 360 of 1994 ),

      • (II) a segregated fund or a managed fund, or other collective investment fund, managed by a person in that group who is the holder of an authorisation issued by the Central Bank of Ireland pursuant to –

      • (A) the Investment Intermediaries Act 1995 ,

      • (B) the European Union (Markets in Financial Instruments) Regulations 2017 ( S.I. No. 375 of 2017 ), or

        • (C) any other enactment,

        • (III) a unit trust scheme authorised by the Central Bank of Ireland under the Unit Trusts Act 1990 and managed by a person in that group,

        • (IV) an investment company authorised by the Central Bank of Ireland under Part 24 of the Companies Act 2014 ,

        • (V) a collective investment scheme authorised by the Central Bank of Ireland under the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 ( S.I. No. 352 of 2011 ),

        • (VI) an undertaking for collective investment in transferable securities authorised by a competent authority in another Member State in accordance with Council Directive 2009/65/EC⁵ of the European Parliament and of the Council,or

        • (VII) bonds issued by the government of any Member State.

• (9) For the purposes of subsection (8)(a), a reference to ‘investment’ shall be deemed to include the proportion attributable to the resources of the scheme (whether directly or through any intervening fund) of any investment in the group referred to in that subsection –

  • (a) by the manager of –

    • (i) a segregated fund,

    • (ii) a managed fund,

    • (iii) any other collective investment fund,

    • (iv) a unit trust scheme,

    • (v) an investment company, or

    • (vi) a collective investment scheme, or

  • (b) which is comprised in an investment fund to which an insurance policy or contract of assurance falling within Class III or Class VII of the classes of insurance specified in Annex I to the European Communities (Life Assurance) Framework Regulations, 1994 is connected.

• (10) In this section –

‘collective investment undertaking’ means –

- (*a*) an investment undertaking within the meaning assigned to it by section 739B of the [Taxes Consolidation Act 1997](https://www.irishstatutebook.ie/1997/en/act/pub/0039/index.html) ,

- (*b*) a unit trust which neither is, nor is deemed to be, an authorised unit trust scheme within the meaning of the Unit Trust Act 1990,

- (*c*) an undertaking for collective investment in transferable securities within the meaning assigned to it by Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009, situate in any Member State,

- (*d*) a common contractual fund within the meaning of section 739I(1)(a)(i) of the [Taxes Consolidation Act 1997](https://www.irishstatutebook.ie/1997/en/act/pub/0039/index.html) , or

- (*e*) an alternative investment fund within the meaning assigned to it by Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011<sup><a href="/ie/law/IE-2021-si-128/3#fn-6">6</a></sup> , situated in any Member State;

  ‘insurance policy’ means an insurance policy or contract of assurance issued by any person who is the holder of an authorisation –

- (*a*) granted by the Central Bank of Ireland under the European Union (Insurance and Reinsurance) Regulations 2015 ( [S.I. No. 485 of 2015](https://www.irishstatutebook.ie/2015/en/si/0485.html) ), or

- (*b*) granted by the authority charged with the duty of supervising the activities of insurance undertakings in a Member State other than the State in accordance with Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009.

• (11) This section shall not apply in respect of investments made by the trustees of a one-member arrangement before the coming into operation of the European Union (Occupational Pension Schemes) Regulations 2021.”.

Part 5 Governance requirements

Amendment of section 59A of Principal Act

27.

• (a) the substitution of the following subsection for subsection (1):

• “(1) A person shall not act as a trustee of a scheme or trust RAC unless the person –

  • (a) is, having regard to section 64AE, of good repute and integrity,

  • (b) has the qualifications and knowledge which, together with the qualifications and knowledge of the other trustees, are collectively adequate to enable all the trustees of the scheme or trust RAC to ensure the sound and prudent management of that scheme or trust RAC, and

  • (c) has experience which, together with the experience of the other trustees, is collectively adequate having regard to the requirement in subsection (1A), to enable all the trustees to ensure the sound and prudent management of that scheme or trust RAC.”, and

• (b) the insertion of the following subsections after subsection (1):

• “(1A) At least one of the trustees of the scheme or trust RAC shall have not less than 2 years’ experience as a trustee of a scheme or trust RAC within the immediately preceding 3 years which is of a type that is adequate for him or her to ensure the sound and prudent management of that scheme or trust RAC.

• (1B) Where, as referred to in section 64AC(2), a body corporate is appointed as the sole trustee of a scheme or trust RAC –

  • (a) each of the directors of that body corporate shall be, having regard to section 64AE, of good repute and integrity,

  • (b) the directors of that body corporate shall have the qualifications, knowledge and, subject to paragraph (c), experience which, together with the qualifications, knowledge and experience of the other directors, are collectively adequate to enable them to ensure the sound and prudent management of that scheme or trust RAC, and

  • (c) at least one of the directors who effectively run the scheme or trust RAC shall have, within the immediately preceding 3 years, not less than 2 years’ experience as a trustee or as a director of a body corporate appointed as trustee of a scheme or trust RAC, which is of a type that is adequate for him or her to ensure the sound and prudent management of the scheme or trust RAC.”.

Insertion of Part VIB into Principal Act

28.