Whether you conduct your business as a sole-trader, in partnership, or through a company, if you operate an occupational pension scheme for the benefit of your employees, then you, your partners, members of your staff, or company directors may have assumed a role as pension scheme trustee.
According to Yann Harrison, Wealth Management Director with Russell Brennan Keane, “the role of trustee is an important one and one which carries significant legal duties and responsibilities of which all trustees should be fully aware”.
With effect from 1 February 2010, Section 59AA of the Pensions Act 1990 obliges employers to arrange appropriate trustee training for pension scheme trustees in relation to the Pensions Act, laws governing the operation and effective management of pension schemes, and the duties and responsibilities of trustees.
While new trustees must complete a trustee training programme within six months of their appointment, persons acting as scheme trustees on 1 February 2010 were obliged to undertake training on or before 1 February 2012 with an ongoing requirement to retake appropriate training every two years thereafter.
“Approaching the two year anniversary from the date most trustees will have last undertaken formal training, it is critical for all employers and trustees to consider their respective obligations under the Pensions Act and to ensure that appropriate training is undertaken by 1 February 2014 at the latest” advises Harrison. “Trustees are obliged to make a declaration in their pension scheme’s Annual Report confirming whether or not the trustees have received appropriate trustee training in accordance with their obligations under the Pensions Act and within the time limits set out therein”.
All pension schemes are subject to Pensions Board compliance and regulatory audits and, according to Harrison, “the failure of an employer to arrange appropriate training for trustees can result in prosecution and the imposition of fines”. He adds that “trustees would be best advised to take steps to ensure they meet their obligations under the Act” because potentially trustees in breach may “be held personally liable to an on-the-spot fine of €2,000”.
The Pensions Board has developed a free of charge e-learning facility to help trustees meet their obligations. The online course comprises nine individual modules which, in total, will take about 9 hours to complete, resulting in the award of a certificate of understanding to successful participants. Alternatively, Harrison advises, “organisations, like Russell Brennan Keane, a registered trustee trainer with The Pensions Board, provide intensive full or half day trustee training courses specifically designed to promote active participation and discussion, with the objective of equipping new and existing trustees in the essentials of trusteeship”.
Harrison says that, for the most part, trustee training is positively received. “Trustees recognise that proper, well delivered training serves to educate them as to their responsibilities, background tax and pension law and the implications of their scheme’s trust deed and rules”.
Additionally, appropriate training should give trustees a better understanding of their scheme’s finances and, in turn, enable them carry out their duties as trustee more effectively and efficiently, enhancing the decision making and administrative process and ensuring that they are capable of having meaningful discussions with their scheme’s administrators and investment managers. As Harrison concludes, “this should not only give the trustees the confidence to undertake their role without unnecessary concern of exposure to legal liability but, more importantly, be to the long-term benefit of all scheme members”.
About RBK
Russell Brennan Keane is one of Irelands leading business advisory and accountancy firms. With 50 years experience providing professional advisory services to a range of clients in the mid to large corporate market in Ireland, from offices in Dublin, Athlone and Roscommon.
To find out more, please call Yann Harrison on (090) 6480600 or email pensions@rbk.ie.
http://www.leadingedgealliance.com/thought_leadership/Pension%20Trustees.pdf
