Pensions Update – Autumn 2017

1 LEGISLATION

1.1 Pensions Acts 1990 to 2015

Section 80(1) of the Pensions Act provides that where a rule of a scheme does not comply with the principle of equal treatment on the gender ground, it shall, to the extent that it does not so comply, be rendered null and void with effect from 17 May 1990. Section 80(3) preserves for pre-1990 benefits an (otherwise null and void) rule relating to retirement ages for a limited period until 31 December 2017 (e.g. where a female active member has pre-1990 benefits which have a different NRD attaching to them than an equivalent male active member, the employers and trustees are permitted to retain that unequal treatment up to 31 December 2017 but after that date the male active pre-1990 benefits must be levelled up to those of his female counterparts). Where an otherwise null and void rule remains in force for pre-1990 benefits in the scheme provisions on 1 January 2018 then the trustees of the scheme will be required to "level up" benefits (i.e. all members regardless of gender will be entitled to the more preferential benefits). This is likely to put a funding strain on any scheme to which it applies. Prior to 31 December 2017, trustees and employers have a final opportunity to confirm or clarify (subject to any restrictions on the amendment power in the scheme provisions) the treatment of pre-1990 benefits.

1.2 Other legislation:

(a) Financial Services and Pensions Ombudsman Act (the "PO Act")

The PO Act was signed into law on 26 July 2017. This Act merges the offices of Financial Services Ombudsman and Pensions Ombudsman. As the PO Act has not yet been commenced by the Minister, no section of the Act is currently in force.

(b) The Social Welfare and Pensions Bill 2017

The Dáil is scheduled returned from summer recess on 20 September 2017. It is anticipated that the Social Welfare and Pensions Bill will continue to progress through the Dáil and we will publish further updates as the Bill progresses.

(c) Budget 2018

Budget 2018 was published on 10 October 2017. The State pension (contributory) is being increased by5 per week from March 2018. The maximum weekly rate for the State pension (contributory) will be243.30 which results in annual amount of c.12,650. The minimum annual pension income in order to transfer benefits to an approved retirement fund is12,700. The increase in the State pension (contributory) may result in this income threshold being met by more people and may result in a future...