What is IORP II?
The Minister for Social Protection signed legislation on 22nd April 2021 which officially transposed the Second European Pensions Directive (known as IORP II) into national law.
The legislation brings into force in Ireland the wide-ranging legal requirements and governance standards originally introduced in the IORP II Directive in 2017. Its arrival heralds the biggest change in the occupational pension’s regulatory landscape in this country for a generation.
The regulations closely follow the original European Directive, and Mercer have already been helping trustees and employers to work towards these requirements. In anticipation of the Directive, we have developed governance frameworks that trustees can tailor to their schemes and a pension risk management service to act as an outsourced risk management function for schemes.
What does the IORP II directive cover?
- Enhanced pension scheme governance and internal controls;
- Strengthening schemes’ risk management systems, including a requirement for a formal risk management function;
- Requirement for schemes’ to carry out an internal audit and have an internal audit function;
- A much broader scope of member communications requirements, including provision of annual benefit statements to deferred members;
- New fitness and probity standards for trustees and other persons involved in running schemes;
- Extended powers for the Pensions Authority with respect to applying forward-looking, risk-based principles to the supervision of pension schemes and monitoring of compliance;
- Updated rules relating to the operation of cross border schemes and transfers between schemes in Ireland and the EU.