After a delay of over two years, the Minister for Social Protection signed legislation on 22nd April 2021 which officially transposes the Second European Pensions Directive (known as IORP II) into national law.
The main headlines so far
There are very few surprises based on what was already known from the IORP II Directive. Many provisions have been taken word for word from the Directive.
The changes apply to all occupational pension schemes. There are no derogations - although one member arrangements will have a 5 year grace period before they will be required to comply.
The Pensions Authority issued the first tranche of regulatory guidance on 13 May, although there was little additional clarification. Further details are now expected as part of Codes of Practice which will be open to public consultation over the summer, with final Codes available in November.
The changes are in force with immediate effect although some compliance tasks will have transitional deadlines.
The first key compliance milestone will arrive on 31 January 2022, and trustees will need to certify compliance in respect of 2021.
Trustees are expected to be able to show evidence of a plan to meet the new requirements, with specified timelines and progress milestones.
How can Mercer help?
Mercer’s expert consultants, assisted by our designated IORP II team, are subject matter experts in their field and are currently helping hundreds of schemes take the necessary and proportionate actions they need to enable a seamless and cost-effective transition to the new regulatory regime.
A full range of governance and internal controls supports and tools are available which can be adapted to meet requirements, including monitoring ongoing compliance.
Our pension scheme Risk Management service draws on extensive expertise and can provide a range of solutions to fit your needs and budget as you evolve and enhance your risk management system.
Our Investment specialists can help you navigate through the expanded investment rules, including incorporation of Environmental, Social and Governance considerations and strategies.
Mercer’s Administration and Member Communications services will ensure you meet all Pension Benefit Statement compliance in good time before the first delivery deadline at the end of December 2022.
Mercer also provides a designated Scheme Secretarial service to support you with all areas of scheme operations and governance and other organisational aspects.
Download "The new IORP II legislation - consideration for Trustees"