In the penultimate instalment of our '12 Days of Christmas' series, we highlight three pension law developments from 2019.
New Beneficial Ownership Rules for Trusts
We reported in February on Irish regulations (the European Union (Anti-Money Laundering: Beneficial Ownership of Trusts) Regulations 2019) that were introduced on foot of the Fourth Anti-Money Laundering Directive (2015/849).These Regulations require trustees to maintain a register of information regarding a trust's beneficial owners. Trustees must take "all reasonable steps" to obtain and hold adequate, accurate and current information in respect of the trust's beneficial owners in an internal register.
The definition of “beneficial owner” and how the concept applies to pension schemes is open to interpretation and practice has yet to develop in this area.
The information regarding the trust's beneficial owners will eventually be used to populate a central register maintained by a State agency. It will be accessible by the Revenue Commissioners, other nominated competent authorities and any natural or legal person that can demonstrate a “legitimate interest” in the information. The deadline for the establishment of a central register for trusts has been extended to 10 March 2020 by the Fifth Anti-Money Laundering Directive (2018/843). Further Irish regulations are expected before that date.
Master Trusts Proposals
In June we commented on the revised proposals from the Pensions Authority for master trusts following its consultation in 2018 on the master trust subject. We focused on some of the practical implications of these proposals for existing master trusts, including the proposed capitalisation requirements. We noted at that time that the proposals won't be adopted into formal codes of practice until IORP II is transposed. There is still some uncertainty about the transposition timeline for IORP II, but it is expected to occur during 2020 at which point the codes of practice for master trusts may be published.
New Pension Rights for Migrant Workers
We commented on the implementation of aspects of the Portability Directive (by the European Union (Supplementary Pension Rights) Regulations 2019) into Irish law and the new pension rights this creates for migrant workers (known as "outgoing workers"). We highlighted the difficulty employers and trustees are likely to face in identifying who in their workforce is an "outgoing worker" with enhanced pension rights.
The Pensions Authority has since issued a guidance note on the topic. It has recommended that trustees and employers put in place processes to determine whether a person is an "outgoing worker", both on commencing service and on leaving service. These new rules will have an impact on employers in Ireland with a significant turnover in staff who join from or move to other EU member states.