The Pensions Board S

The Pensions Board’s

PRSA Compliance Strategy

At its meeting on 5 September 2003 the Pensions Board agreed a PRSA Compliance Strategy. The Strategy outlines the Board’s approach towards monitoring compliance and emphasises the fact that any breach of the requirements of the Pensions Acts 1990-2003 may be considered an offence for which, inter alia, the PRSA provider and/or employer may be prosecuted or may lead to consideration by the Board of the suspension or withdrawal of approval of the PRSA product.

The Pensions Board’s

PRSA Compliance Strategy

Introduction

The role of the Pensions Board as set out in the Pensions Acts 1990-2003 (“the Act”)is “to monitor and supervise the operation of (the) Act and pensions developments generally, including the activities of PRSA providers as such providers, the provision of PRSA products and the operation of Personal Retirement Savings Accounts”. The Board’s Mission Statement encompasses a requirement “To promote the security and protection of members ofoccupational pension schemes and contributors to Personal Retirement Savings Accounts, in accordance with the (Act)”.

In its Strategy 2002-2005 document the Board’s General Objectives include to “Put in place an operate processes and procedures for regulation of PRSAs”.

The PRSACompliance Strategy adopted on 5 September 2003by the Board is as follows:

Employer Obligations

Employers by the 15th September 2003 must enter into a contract with a PRSA provider so that access to at least one standard PRSA will be available for all “excluded employees” as and from that date. The Employer should ensure that the PRSA product in question is approved pursuant to Part X of the Act.

In addition, employers must:

Notify ‘excluded employees’ that they have a right to contribute to a Standard PRSA;
Inform ‘excluded employees’ of your choice of Provider and PRSA facility decided on;
Allow the PRSA provider or intermediary reasonable access to ‘excluded employees’ at their workplace;
Allow reasonable paid leave of absence to enable such ‘excluded employees’ to set up a Standard PRSA, subject to work requirements.
Provide a contribution deduction facility if requested;

In addition, where an employer does not currently offer the facility for Additional Voluntary Contributions (AVCs) there is an obligation to make available a Standard PRSA.

The Board shall monitor these obligations through random audit of employers in relation to the aforementioned obligations and by investigating any ‘whistle-blows’ in relation to possible breaches of the Act.

Failure to comply with any of these obligations may lead the Board to conduct a Section 18 investigation and initiate a prosecution.

Remittance of Contributions Compliance Strategy

Where, in accordance with Section 121 of the Act, an employer fails to remit contributions deducted from an employee within the specified period, or provide the necessary disclosure that these sums have been remitted to the PRSA Provider the Board may, following an investigation, consider initiating a prosecution under the Act.

PRSA Providers

Monitoring of PRSA Product Approval

PRSA products shall be approved jointly by the Revenue Commissioners and the Board. On-going monitoring of PRSA products shall be conducted by on-site monitoring by the Board of PRSA Providers to ensure that the requirements for approval are in compliance with the Act.

Any breach of the approval requirements may lead the Board to conducting a Section 18 investigation. Failure to remedy any possible breaches of the Act may lead the Board to considering the suspension or withdrawal of approval of the PRSA product in addition to the possible initiation of a prosecution.

Reporting Obligations to the Board

PRSA Providers must provide the Board with, inter alia, a report in relation to its PRSA business, a return relating to the contributors to its PRSA products and audited accounts within the timeframes established by the Act and Regulations. In addition, the PRSA Provider must promptly notify the Board of any material fact or circumstance which relates to that PRSA provider or the conduct of its activities which might reasonably influence the Board when determining whether to exercise its powers of suspension or withdrawal of PRSA approval.

Any failure to provide the Board withany of the aforementioned information, or part thereof within the time limits established may lead to a Section 18 investigation, a prosecution and/or consideration by the Board of the suspension or withdrawal of the PRSA product approval.

PRSA Providers Disclosure Requirements to Persons and PRSA Contributors

PRSA providers are under a legal obligation to disclose certain information to persons before they enter into a PRSA contract and once they become PRSA contributors to provide them with updates at regular intervals established by law.

The Board shall monitor these disclosure requirements by conducting audits of the content of the documentation provided to persons before they enter into a PRSA contract and PRSA contributors to determine whether or not the PRSA Provideris in compliance with the legislative requirements.

In addition, the Board shall monitor the documentation to ascertain whether or not it was prepared and made available to relevant parties within the time periods specified in legislation.

Discovery of any possible breach of the Act duringthe audit process may lead to an investigation, and where necessary a Section 18 investigation, of the PRSA Provider or to the consideration of a prosecution under the Act. In addition, recurrent breach of these provisions may lead the Board to consideration of suspension or withdrawal of the PRSA product.

Fee Payment Compliance Strategy

The Board shall ensure compliance byPRSA Providers with the requirement to pay annual fees to the Board pursuant to Section 117(5) of the Act. This fee shall be remitted to the Board on or before 31 January in each year.

Failure to pay such arrears within a specified timelimit may result in a prosecution being initiated by the Board. Recurrent breaches of the obligation to pay fees within a timely fashion may lead the Board to reassess the approval status of the PRSA Providers involved.