Backlash over proposals to get rid of 'lay' trustees on pension fund boards
THERE has been a backlash against proposals to effectively end the role of "lay" trustees of pensions schemes.
The Pensions Authority has proposed that it would be mandatory to have a professional pension qualification to act as a trustee in defined contribution schemes, a move that would remove most worker trustees.
But a broad range of groups have criticised this, prompting an expectation that the proposal will be watered down.
It is feared the proposed change would lead to a mass exodus of unpaid trustees, to be replaced by a limited number of professionals in fewer schemes.
A Pensions Board synopsis of the views submitted to it states: "There was a common view that lay trustees being considerable value to trustee boards, as well as being a vital link between members and the scheme itself."
Scheme members know and trust employee representatives who act as trustees, and use them to bring up concerns and queries, the synopsis added.
"It was expressed that lay trustees are also useful in conveying institutional history/culture and often result in employees becoming more engaged with their pension benefits," the document states.
Other submissions, among the 30 received, said it would be make sense to have professional trustees to deal with the fact that there are 200,000 people acting as trustees.
Having professional-only trustees would lessen this number, it was argued.
The Pensions Authority, the State body that regulates pensions, launched a submissions process after proposing that all trustees have a professional pension qualification to act as a trustee.
Half of the submissions were in favour of the proposal, but half were against it. However, the Pensions Authority did not specify which groups were in favour and which were against it.
It is thought that those in favour of the proposal are advisory firms, which would have a material interest in ensuring all trustees had a professional pension qualification.
Chief executive of the Irish Association of Pension Funds Jerry Moriarty questioned the failure to provide a context for various views outlined in the Pensions Authority synopsis.
The Pensions Authority insisted it has not reached a definitive conclusion, but it is understood it is moving away from a requirement that every trustee hold a professional qualification.
Such a move would be in line with an new EU Directive.