The Pensions Authority report on
Inspections of
Registered Administrators
2013
Issued April 2014
Introduction
The Pensions Authority (“the Authority”), formerly the Pensions Board, commenced
onsite inspections of registered administrators in 2010. Since 2011 the Authority has
published a report on its website where inspection findings from the previous year
have been set out. Previous RA inspection reports are available on the Authority’s
website, and the Authority would encourage all registered administrators and their
staff to review these reports.
The experience from the 21 inspections carried out in 2013 was broadly in line with
previous years however the gravity of the four cases referred to in 2012 report was
not repeated. In each of the four serious cases arising in 2012, remedial action has
been taken to rectify shortcomings identified in the inspections and all follow up
actions have been completed.
The majority of the findings during 2013 related to failures to address the disclosure
requirements of the Pensions Act 1990, as amended (“the Act”), and related
Disclosure Regulations. The Act and related Disclosure Regulations set out clearly
what must be included by a registered administrator in the preparation of the trustee
annual report and annual benefit statement for members and it is essential that all
the required items are included. Examples of the more common disclosure
shortcomings noticed during our inspections in 2013 were as follows:
Annual benefit statements
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The name and address of the person from whom the scheme rules, letter or
booklet are available was commonly omitted.
While the option to purchase additional benefits by means of additional
voluntary contributions (“AVCs”) under a scheme is included in most annual
benefit statements produced, a statement of how the option may be exercised
was regularly omitted.
Information on the method of calculation of preserved benefits and a
statement that the trustees are required by Section 59(1)(a) of the Act to
ensure, insofar as is reasonable, that the contributions payable by the
employer and the members, where appropriate, are received and invested
within the stipulated timeframes was not given in every case.
A statement of the current State Pension (Contributory) payable under the
Social Welfare (Consolidation) Act 2005 was not always included.
Trustee annual reports
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The name or title, and the address of the person to whom enquiries about the
scheme generally or about an individual's entitlement to benefit was
sometimes omitted.
Most trustee annual reports tested failed to include a statement as to whether,
in the case of a scheme established by trust, the trustees have or have not
received training as required by section 59AA of the Act.
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While the identity of all the employers participating in a scheme should be
disclosed in a trustee annual report, in some instances only one employer
was actually disclosed.
Details as to the scheme actuary, auditor, solicitor, bank, investment
manager, custodian and administrator acting for or retained by the trustees
during the scheme year was incomplete or inaccurate at times.
Disclosure shortcomings remain the most common finding despite previous
pronouncements by the Authority in this regard. Findings in this area tend to be more
common when standard templates are used across all schemes under a registered
administrator’s management and where no rigorous review or appropriate
customisation is in place to deal with non-standard cases. Inconsistencies and errors
of this nature can be readily identified where the registered administrator conducts
an audit or peer review and registered administrators are, once again, encouraged to
put such quality assurance measures in place.
The Authority’s onsite inspections
The Authority’s onsite inspections, generally take between two and five days, and
consist of, authorised officers of the Authority, testing on a sample basis whether a
registered administrator is complying with the provisions of the Act and related
regulations in carrying out the core administration functions. The Authority has
procedures for testing each core administration function and each procedure is
designed to try and identify issues of a disclosure, procedural or control nature which
may exist within a registered administrator. However, as the Authority’s onsite
inspections use a sampling based approach, they do not constitute a comprehensive
review of every document produced or every system used by a registered
administrator and should not be viewed as the Authority approving a registered
administrator’s disclosure documents, procedures or controls.
Registered administrator’s
administration functions
competence
to
carry
out
the
core
At the time of registration and renewal of registration, administrators self-certify that
they are competent and capable of carrying out the core administration functions.
Part of being competent and capable is ensuring that all annual scheme reports and
annual benefit statements produced are in compliance with the provisions of the Act
and related Disclosure Regulations. This means registered administrators must have
procedures and controls in place to ensure no annual scheme reports or annual
benefit statements are issued late and all the disclosure requirements of the Act and
related Disclosure Regulations are included in these disclosure documents.
The Authority, expects registered administrators, to carry out ongoing reviews of
their own performance as a registered administrator. This may take the form of an
internal audit or some other defined and documented review mechanism, depending
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on the size of the registered administrator. Part of this review should identify
changes to legislation which will be included in future annual scheme reports and
annual benefit statements produced by the registered administrator. The Authority
has a free news e-mail service where changes to legislation are announced. This
service can be signed up to, through the Authority’s website.
The Authority considers the requirement to keep proper records and the issuing of
annual trustee reports and member benefit statements that are compliant and on
time, a key component in the protection of members’ interests and intends to
continue to actively monitor compliance in this area.
15 April 2014
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