The Pensions Board’s regulatory powers A practical perspective

1. The Pensions Board’s regulatory powersA practical perspective Sylvia McNeece 25 September 2013

2. Introduction Context Approach to regulation Overview of regulatory powers Enforcement Future strategy

3. Who the Board supervises Approximately 200,000 trustees 61,232 active occupational pension schemes €75 billion assets under management 138 PRSA products €3.6 billion PRSA assets 173 Registered Administrators

4. How the Board supervises • Hierarchy of risk priorities:- • Misappropriation of scheme or PRSA assets or contributions • Incorrect calculation of benefit entitlements • Defined benefit schemes inadequately funded • Non-compliant investment of pension assets • Insufficient information being provided to members

5. Regulatory powers Our powers can be broadly categorised into four key areas as follows:- • Power to issue statutory requests for information and carry out onsite enquiries and investigations • Powers exercisable through the High Court; • Powers to suspend or withdraw approval for certain activities. • Powers to prosecute and (on the spot fines)

6. Power to obtain information and to investigate • Section 18 of the Pensions Act (power to request information) • Compliance with requests very high • Courts take a severe view of breach of section 58A • Over 40 Convictions for failure to comply since 2010 • Section18 permits Board to carry out on-site investigation

7. Fining and remedial powers • On-the-spot fines • €66,000 paid to the Board by 17 trustees in 2012 • Failure to submit or late submission of an AFC • Failure to meet statutory deadlines in preparing or disclosing annual reports and accounts or issuing benefit statements to members • Advantages • Disadvantages

8. High Court Board can apply to the High Court for a variety of orders Board provides evidence of a potential risk to members’/contributors’ benefits Time and cost factors Other considerations

9. Suspend or withdraw approval The Board has power to suspend or withdraw approval of a PRSA product Power to terminate or refuse to renew the registration of a Registered Administrator

10. Directing a scheme wind up or benefit reduction Unilateral power to direct an underfunded defined benefit scheme to wind up or to reduce accrued benefits Power as of 2013 – not exercised as yet Considerations re strategy and secondary legislation

11. Prosecutions Some summary matters prosecutable by regulatory authorities e.g. the Board in the District Court (DC) If offence not considered minor, case brought on indictment to Circuit Court and DPP must take over On conviction in the DC fine up to €5,000 or up to 1 year imprisonment, or both If convicted on indictment a fine of up to €25,000, 2 year imprisonment, or both Section 3 of the Act

12. Prosecutions – failure to remit contributions First risk priority – misappropriation of pension scheme assets Procedures for investigating the offence of deduction and non-remittance of contributions Statutory time limits

13. Results Since 2010 over 40 successful prosecutions relating to deduction and non-remittance of contributions 15 successful cases relating to failure to respond to information requests Significant number of cases struck out or withdrawn due to payment of all arrears Approx. €3 million arrears repatriated

14. Interaction with other regulators Garda Bureau of Fraud Investigation NERA ODCE

15. Recap Considerations when choosing from more than one regulatory power Additional powers – considerations Information sharing

16. Any questions?