Helping trustees prepare for the compliance deadline
It’s now less than two years to the IORP II compliance deadline of 22 April 2026. This deadline applies to one member arrangements such as executive pension plans started on or before 22 April 2021 and trustees must either take steps to become IORP II compliant or wind up the scheme and transfer to an alternative arrangement by this date.
IORP II is an EU Directive that set new requirements for occupational pension schemes. Legislation was passed into law in April 2021 in Ireland and imposes significant compliance demands on trustees who will, in general, be expected to provide for enhanced administration and governance that will incur substantial cost. This cost will be borne by the scheme and ultimately the member.
Find out more about what IORP II means for your client in Your guide to IORP II
To avoid the additional responsibilities and costs associated with being IORP II compliant, trustees can choose to wind up the existing scheme and transfer the member’s policy to a suitable alternative arrangement such as:
- A Personal Retirement Savings Account (PRSA)
- An occupational pension scheme which they're already a member of, including a Master Trust
- A Buy Out Bond
Or if the circumstances are right, the member can retire from the scheme and take their benefits.
Finance Act 2022 and PRSA
Finance Act 2022 enacted changes in legislation meaning the PRSA may be better suited to those that would previously have been served by an Executive Pension. Choosing a PRSA in these cases retains the standalone nature of the plan and lets the individual retain control over their investment choices and contributions. The PRSA is now a comparable alternative to an Executive Pension and some reasons to choose it include:
- Improved funding limits (subject to standard fund threshold and affordability) for employees and company directors, and all employer contributions receive tax relief in the year they are paid
- Where an employee dies in service, the full PRSA policy value is paid to their estate
- PRSA holders can drawdown their retirement benefits in stages, up to age 75, using multiple PRSAs
With our online application, it’s easier and more efficient than ever to start a Synergy PRSA. Get started on a new online application here.
Talk to your Business Manager today about IORP II.