Number 18/2002: Chapter 5 Amendments to Part V of Principal Act

18 2002

PENSIONS (AMENDMENT) ACT, 2002

Chapter 5

Amendments to Part V of Principal Act

Amendment of Part V (title thereof) of Principal Act.

35. —Part V of the Principal Act is amended by the substitution for the title to that Part of the following title:

“PART V

Disclosure of Information in relation to Scheme and Remittance of Contributions by Employers”.

Amendment of section 54 of Principal Act.

36. —Section 54 of the Principal Act is amended—

(a) in subsection (1)—

(i) by the insertion after “trustees of a scheme” of “or any employer to whom a scheme relates”; and

(ii) by the insertion in paragraph (b) after “scheme” of “, including any commission, charge, expense or remuneration paid or received in connection with the scheme”;

(b) in subsection (4)—

(i) by the substitution of the following paragraph for paragraph (a):

“(a) The trustees of a scheme may request an employer to whom the scheme relates to furnish them with such information as they may reasonably require for the purposes of their functions under this Act or regulations thereunder and the employer shall comply with any such request.”;

(ii) by the insertion after paragraph (a) of the following paragraph:

“(aa) Any employer to whom a scheme relates may request the trustees of the scheme to furnish him with such information as he may reasonably require for the purposes of his functions under this Act or regulations thereunder and the trustees shall comply with any such request.”;

(iii) by the insertion in paragraph (b) after “trustees of the scheme” of “or any employer to whom the scheme relates”; and

(iv) by the insertion in paragraph (b) after “trustees” of “or the employer”.

Amendment of section 55 of Principal Act.

37. —Section 55 of the Principal Act is amended—

(a) by the substitution in paragraph (b) of subsection (2) of “1997, or” for “1997.”;

(b) by the insertion after paragraph (b) of subsection (2) of the following paragraph:

“(c) to such extent as may be prescribed, a scheme the winding up of which has commenced.”; and

“(3) Where an actuarial funding certificate having an effective date after 1 January 2001 has been prepared under section 42 in relation to a scheme each annual report prepared under subsection (1) which relates to a period ending on a day which falls after the effective date of that actuarial funding certificate shall, unless subsection (4) applies to it, include a statement by an actuary in such form as may be prescribed as to whether he is reasonably satisfied that, if he were to prepare under section 42 an actuarial funding certificate having an effective date of the last day of the period to which the annual report relates, he would certify that the scheme satisfies the funding standard provided for in section 44.

(4) Where in the most recent actuarial funding certificate prepared under section 42 in relation to a scheme the actuary certifies that at the effective date of that certificate the scheme does not satisfy the funding standard, and a funding proposal has been submitted by the trustees of the scheme to the Board in accordance with section 49, each annual report prepared under subsection (1) which relates to a period ending on a day which falls after the effective date of that actuarial funding certificate shall include a statement by an actuary in such form as may be prescribed as to whether he is reasonably satisfied at the last day of the period to which the annual report relates that the scheme will satisfy the funding standard at the effective date of the next actuarial funding certificate.

(5) Where an annual report prepared under subsection (1)—

(a) does not contain a statement by the actuary required under subsection (3) or (4), as appropriate, or

(b) contains the statement by an actuary required under subsection (3) but the actuary does not state therein that he is reasonably satisfied that, if he were to prepare under section 42 an actuarial funding certificate having an effective date of the last day of the period to which the annual report relates, he would certify that the scheme satisfies the funding standard provided for in section 44, or

(c) contains the statement by an actuary required under subsection (4) but the actuary does not state therein that he is reasonably satisfied that the scheme will satisfy the funding standard at the effective date of the next actuarial funding certificate,

then in each case the trustees of the scheme shall notify the Board in writing to that effect within such time limit as may be prescribed.

(6) Regulations may prescribe that an actuary, in making the statement referred to in subsection (3) or (4) shall comply with the applicable professional guidance issued by the Society of Actuaries in Ireland and specified in the regulations or with any applicable guidance issued by any other person and specified in the regulations.”.

Amendment of section 56 of Principal Act.

38. —Section 56 of the Principal Act is amended—

(a) by the insertion in subsection (3) after “scheme” of “or the business of a PRSA provider”;

(b) by the insertion in subsection (4)—

(i) after “of a particular scheme” of “or of the business of a particular PRSA provider”; and

(ii) after “trustees of the scheme” of “or to the PRSA provider”; and

(i) by the substitution in paragraph (a)(iii) of “1997, or” for “1997.”;

(ii) by the insertion after paragraph (a)(iii) of the following:

“(iv) to such extent as may be prescribed, a scheme the winding up of which has commenced.”;

(iii) by the substitution in paragraph (b)(iv) of “1997, or” for “1997.”; and

(iv) by the insertion after paragraph (b)(iv) of the following:

“(v) to such extent as may be prescribed, a scheme the winding up of which has commenced.”.

Indexation of pensions under certain schemes to be considered by trustees.

39. —The following section is inserted after section 56 of the Principal Act:

“Indexation of pensions when in payment.

56A.—(1) In this section ‘indexation’, in relation to a pension, means the provision of an increase, in each successive year of the period during which the pension is paid, of the amount of the pension, each such increase that is so provided being equal to a percentage of the amount of the pension in payment at the time the increase falls to be made, being a percentage at least equal to the lower of—

(a) the percentage increase in the general level of consumer prices during a period of twelve months ending at any time within twelve months before the increase of the amount of pension falls to be made, determined by the trustees in such manner as they think appropriate, and

(b) four per cent.

(2) This section applies to a scheme to which section 56(1)(b) applies, the rules of which do not require either—

(a) indexation of pensions, or

(b) the provision of an increase, in each successive year of the period during which each pension thereunder is paid, of the amount of the pension, each such increase that is specified in the scheme being not less than 3 per cent of the amount of the pension in payment at the time the increase falls to be made.

(3) The trustees of a scheme to which this section applies shall, at intervals not exceeding 3½ years, cause the actuary to value the additional liability which would be imposed on the scheme by the indexation of pensions payable thereunder.

(4) The actuary of a scheme to which this section applies shall report on the additional liability and the resulting requirement for contributions which would be imposed on the scheme by the indexation of pensions as regards—

(a) pensions then in payment under the scheme, and

(b) pensions not then in payment thereunder whose payment is anticipated.

(5) The trustees of a scheme to which this section applies shall, following receipt of the actuary's report referred to in subsection (4), consider the possibility of effecting indexation of—

(a) pensions then in payment under the scheme, and

(b) pensions not then in payment thereunder whose payment is anticipated,

and, where effecting such indexation of pensions would require the exercise of a discretion by any other person, they shall report on the results of their consideration to that person.

(6) Where a person receives a report from the trustees of a scheme under subsection (5), he shall furnish to the trustees a response by him to that report.

(7) Regulations may provide for—

(a) the matters to be addressed by the actuary of a scheme in his report with respect to the matters referred to in subsection (4),

(b) the matters to be addressed by a person in making a response under subsection (6), and

Amendment of section 57 of Principal Act.

40. —The following section is substituted for section 57 of the Principal Act:

“Modification of Part V.

57.—Where the Minister considers that it would be unreasonable, having regard to their nature and character and the size of their membership, to require specified schemes or categories of schemes to comply fully with sections 54, 55, 56 and 56A, he may by regulations made with the consent of the Minister for Finance provide that, in relation to those schemes, one or more or all of those sections shall not apply, or shall apply with specified modifications, being modifications that, in the opinion of the Minister are reasonable and are not such as to relieve the trustees of the obligation to furnish such information under those sections as is appropriate in all the circumstances.”.

Obligation of employer to remit contributions under scheme.

41. —The following section is inserted after section 58 of the Principal Act:

“58A.—(1) An employer who deducts any sum from the wages or salary of an employee for remittance to the trustees of a scheme or to another person on their behalf, shall remit every such sum to the trustees or that other person on their behalf, as the case may be, within 21 days following the end of the month in which the deduction was made. An employer shall not make any deductions from the sum required to be remitted by him under this subsection.

(2) Where an employer is obliged (whether under a contract of employment, the terms of a scheme or otherwise) to pay any sum expressed as a cash amount or as a percentage or proportion of an employee's wages or salary (other than a sum deducted from the employee's wages or salary), on behalf of or in respect of that employee, to the trustees of a defined contribution scheme or to another person on their behalf, he shall, within 21 days following the end of every month, pay to the trustees of the scheme or that other person on their behalf, as the case may be, a sum equal to the appropriate cash amount or percentage or proportion of every payment of wages or salary made to that employee during that month. An employer shall not make any deduction from the sum required to be paid by him under this subsection.

(3) An employer who—

(a) deducts any sum from the wages or salary of an employee for remittance to the trustees of a scheme or to another person on their behalf, or

(b) is obliged (whether under a contract of employment, the terms of a scheme or otherwise) to pay any sum, on behalf of or in respect of an employee (other than a sum deducted from the employee's wages or salary), to the trustees of a defined contribution scheme or to another person on their behalf,

shall give or cause to be given to the employee concerned and to the trustees or that other person on their behalf, a statement fin writing not less frequently than once a month specifying—

(i) the total amount deducted from the employee's salary or wages and remitted to the trustees or that other person on their behalf, as the case may be, and

(ii) where appropriate, the total amount paid, on behalf of or in respect of the employee (other than any amount deducted from the employee's wages or salary), to the trustees or that other person on their behalf, as the case may be,

in the preceding month or, if the previous such statement was given less than a month before, in the period since that previous statement was given.

(4) The requirements of subsection (3) relating to an employee shall be regarded as having been satisfied in respect of a particular deduction if the particulars of the deduction are, in accordance with section 9 of the Payment of Wages Act, 1991 , included in the statement given to the employee concerned under that section.”.