IRISH INSTITUTE OF PENSIONS MANAGERS SEMINAR UPDATE ON PENSIONS BOARD ACTIVITIES

1. IRISH INSTITUTE OF PENSIONS MANAGERS SEMINARUPDATE ON PENSIONS BOARD ACTIVITIES Mary Hutch Head of Information & Training The Pensions Board 25 March 2004

2. Agenda • PRSAs • Funding Standard • Pensions Simplification • EU Pensions Directive • National Pensions Awareness Campaign • Investigations and Compliance • Registration and Fee Collection • Information and Guidance • Priorities for 2004

3. PRSAsApproval – Availability - Promotion • First Products Approved February 2003 • First Products available May 2003 • Now 10 Providers with 56 Products • 23 Standard • 33 non-Standard • 3 Sets of Returns – June, September, December 2003 • End June 2003 • 2,550 contracts → €1.4 million asset value • 60/40 in favour of Standard PRSAs

4. Approval – Availability - Promotion • End December 2003 • 19,022 contracts → €41 million asset value • 77/23 in favour of Standard PRSAs • Promotion Via: • National Pensions Awareness Campaign (NPAC) • Liasion with PRSA Providers • CSO Pensions Coverage Module • Results due Summer 2004 • Building block for 2006 review

5. PRSAsMonitoring and Compliance • Pre 15 September 2003 • Publication and mass distribution of 3 Information booklets • Participation in IBEC Roadshows on PRSAs and employers’ obligations • Various NPAC activities • PRSA Compliance Strategy Published on Board’s Website • Compliance Audits • 127 conducted to date • 48 closed • 79 ongoing • ‘Whistleblows’ • 46 to date • 32 closed • 14 ongoing • Social Welfare Inspectorate to assist with Compliance Process • Commencing April 2004 • 10,000 inspections per annum expected

6. Funding StandardShort Term Measures • Funding Problems in DB Schemes due to falling stock markets • Board concerned to: • Retain as many DB Schemes as possible • Subject to protecting members’ interests • Social Welfare (Miscellaneous Provisions) Act, 2003 includes provisions to respond to short term funding difficulties • Section 49 (3) of Pensions Act allows Board to be flexible about specifying date of next AFC • Section 49 (3) Guidelines • Published on Board’s website • Issued to representative organisations

7. Funding StandardLong Term Measures • Board also reviewing long term requirements • Objective to have standard going forward which will most effectively protect members’ interests • Review is examining effectiveness and appropriateness of Funding Standard in light of national and international experience • Board has reviewed timescale which is most appropriate to arrive at optimal outcome • Timescale published so all involved will be aware of plans for timing of introduction of changes

8. Funding StandardLong Term Measures

9. Pensions SimplificationSimplification of Regulation • Board concerned that accumulated effect of regulatory requirements has inhibiting effect on overall pension provision • Ways being examined to ensure appropriate balance achieved between: • Regulatory requirements • Member protection • Cost of pension provision • In 2002 a number of interim recommendations on simplification identified • Working Party involving relevant Government Departments and Board examined range of short term measures to simplify tax treatment of various types of pension provision • Interim Recommendations lead to number of pensions related provisions in Finance Act, 2003 • Further simplifications to be considered for inclusion in Finance Bill, 2005

10. Pensions SimplificationDisclosure of Information Regulations • Legislation Committee has been drafting revised Disclosure Regulations • Draft regulations issued for consultation to representative bodies on Board in 2002 • Feedback from consultation process decided Board to adopt more simplified approach to regulations • Legislation Committee since engaged in drafting regulations into more simplified form • Expected to issue revised regulations in latter part of 2004 • Follow-on is to look at simplification of any further regulations

12. Campaign Overview • Just over half (50.7%) of the Irish workforce currently have supplementary cover, as identified in the CSO Quarterly National Household Survey, Pensions-2002. • €500,000 was made available to carry out a National Pensions Awareness Campaign (NPAC), on behalf of Government in 2003 and again in 2004. • The Board established a NPAC – Project Team to devise an awareness strategy and implementation plan for this important project. • The primary objective of the campaign is to heighten pensions awareness with the view to increasing pension coverage in Ireland. (front row - from left to right ) Kevin Brabazon, Board Member; Anne Maher, Pensions Board. (back row - from left to right) David Malone, Pensions Board; Carmel Foley, Board Member; Rita Morrissey, DSFA; Paul Cunningham, DSFA; Ciaran Long, Board Member; Mary Hutch,(Chairperson), Pensions Board; Aongus Horgan, Pensions Board.

13. The National Pensions Awareness Campaign All the actions within the Campaign are designed to be sharp calls to action. Using our Tag Line -Think about tomorrow. Today. • TVAdverts • Radio Adverts • Media print supplements • Posters • Internet Adverts • Radio and Press interviews • Community Forums will all focus on directing people into action – to either talk to their employer, contact their bank, insurance company, building society or financial advisor to discuss pension options.

14. Support Agencies promoting NPAC Contact has been made with the wide range of support Agencies who have agreed to assist in delivering the NPAC message to their constituent clients and members. These include: ICTU IBEC SFA CCI ISME Institute of Personnel and Development Other organisations and group involved in this process include: Comhairle Citizen Information Centres IFA / ICA National Library Network Rural Leader Groups Area Partnership Companies Hotels Federation LVA and VFI Restaurants Association

15. EU Pensions DirectiveGeneral • Came into force on 23 September 2003 • EU Member states have 2 years to implement i.e. must implement by 23 September 2005 • Key aims • ensure protection for pension plan members • Liberalise investment environment for pension plans in EU • Remove barriers to cross-border pension plans • Differentiates between national pension plans and cross-border plans • Provides legal framework for Pan-European pension plans

16. EU Pensions DirectiveImplementation Process • Establishment of 2 EU Committees • European Insurance and Occupational Pensions Committee (EIOPC) consists of Finance Dept officials/policy level • Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) consists of supervisors/technical level • Irish national plan for implementation process • Not yet decided • Issues to be agreed include time frame, consultation process, separate legislation or inclusion in other legislation • Aim is to implement in April 2005 through Social Welfare Act 2005 • National decision on content of implementation involves • Agreement on where current Irish legislation needs to be amended to meet Directive • Decisions to be made where member state can decide approach

17. Investigations and Compliance Investigations • 2003 Investigations on par with previous years but significant rise in ‘WHISTLEBLOWS’ > Standard Cases 43 > ‘Whistleblows’ 52 95 > Closed Cases 84 • ‘Whistleblows’ almost exclusively related to reports concerning non-compliance with Remittance of Contributions Provisions Disclosure Compliance – Audits • 216 undertaken in 2003 > Successful prosecutions as a result 2 > A number of cases under consideration for prosecution as a result • Otherwise generally satisfactory results

18. Investigations and Compliance Minimum Funding Standard Funding Certificates • AFCs Received 482 • Satisfied MFS 408 • Did not satisfy MFS 74 Funding Proposals • Received and Approved 52 • Pending 22* * 6 relate to schemes which have made applications to Board under Section 49(3). Further 6 schemes have indicated to Board that section 49(3) application is to be made shortly. Section 49(3) Applications • Applications Received in 2003 26 > of which:  Granted 20  Refused 2  Under Assessment 3  Awaiting Further Information 1

19. Investigations and Compliance Occupational Pension Schemes Compliance Strategy • Strategy Document agreed by Board, December 2002 > Published on Board’s website • Ethos of strategy is that any breach of Pensions Acts requirements is subject to prosecution • The strategy deals with > Disclosure Compliance > Investigations > Funding Standard > Fee Payment > Remittance of Contributions

20. Registration and Fee CollectionProcesses • During 2003 Board cracked down on schemes with outstanding fees • Most of amount due was recovered without recourse to legal action • Costly in terms of time and effort • Legal route likely to be considered in future where fees remain unpaid • Board is reviewing scheme registration procedure during 2004 which will involve • Simplification of the process • Further co-operation with Revenue • Making use of technology • Supporting risk based compliance monitoring

21. Information and GuidanceInformation Activities • Information Booklets • 3 new booklets published under auspices of NPAC • ‘Women & Pensions’ 2nd edition launched under NPAC • Other booklets in series being gradually updated to reflect 2002 Act changes • FAQ booklet on Pensions (Amendment) Act, 2002 a “bestseller”! • Information Presentations • 40 given by Board personnel in 2003, many as part of NPAC • Website • ‘New look’ • ‘FAQs hugely popular • ‘Whats new’

22. Pensions Board Website Statistics 2003

23. Information and GuidanceInformation Activities • Enquiry Services • Radical increase in enquiries in 2003 • Lo Call 1890 65 65 65 (NPAC) • PB Bulletin • Issued 3-4 times per annum • Covers Board developments and current activities • Media Relations • Essential for communication information about Boards activities • Promoting pensions coverage

24. NATURE OF ENQUIRIES 20032002 2001 2000 1999 Number Number Number Number Number Preliminary & General 1,636 1,775 1,483 152 128 Establishment of Board 293385 272 1,162 989 Preservation 296 268 222 169 112 Funding Standard 62 53 11 11 10 Disclosure 1,018762 849 840 790 Trustee Duties 157124 174 176 108 Equal Treatment 2020 5 39 31 Compulsory & Voluntary Reporting & Miscellaneous Applications to the High Court 15 6 19 3 11 PRSAs 2,778 Pensions Ombudsman 13 *Other Enquiries 1439 1,973 1,376 1,591 1,037 Total **7,730 5,366 4,411 4,143 3,216 *Other enquiries include matters which do not come under the Board’s remit i.e. personal pension plans, fixed term workers, social welfare entitlements, permanent health insurance. ** The number of enquiries exceeds the number of enquirers as some enquirers raised more than one question.

25. CATEGORY OF ENQUIRERS 20032002 2001 2000 1999 Number Number Number Number Number Pensioner 142114 113 157 87 Active Member 1,891 1,202 1,289 1,186 799 Company/Employer 1,555 702 436 327 194 Trade Union 4136 50 49 59 Pension Practitioner 723 811 686 742 715 Trustee 10195 112 126 91 *Other 2,5412,216 1,3401,236 1,049 Total 6,994 5,176 4,026 3,823 2,994 *Other enquirers include non-members of schemes or PRSAs, research students, media, Government Depts.

26. Information and GuidanceGuidance Activities • Legislation Service • Represented in 2 Volumes • Guidance Notes Service • Represented in more efficient format • 8 sets currently available • Guidance on revised equality provisions to be prepared during 2004 • FAQs on • Remittance of Contributions • Part Time Work • Women & Pensions • PRSAs • Occupational Pensions • Pensions (Amendment) Act, 2002 All on Board’s Website • Trustee Support Services • Enquiries • Trustee Handbook and Codes of Practice – 2nd edition due Summer 2004 • List of Training Courses • Trustee Training Surveys

27. Priorities for 2004 • Progress towards resolution of DB scheme funding issues • Steady PRSA progress • EU Pensions Directive Changes agreed • Plan in place for better register • Successful NPAC 2004 • Improved public confidence in pensions