IORP II and Standard Life Executive Pension Plans

Are there any other posters familiar with this new directive, IORP II, and the implications for Standard Life executive pension plans set up before April 2021?

Standard Life is asking trustees of this type of pension to either transfer it to a PRSA, switch to another pension provider, transfer the pension to a buy-out bond, or retire.

Looks like the costs of regulation are proving too costly again for another Executive pension provider in Ireland.

Any other company directors in the same boat? Are you using your pension vehicle to trade stock market shares or invest in index funds, and have to switch to yet another provider?

Anything useful here?

All one person executive pensions have been shut down. There is onerous reporting required including annual audited accounts. If you are continuing to contribute, the options are a PRSA (which are not subject to IORPS II) or a Master Trust. Standard Life don't have a Master Trust facility so they are offering the PRSA option.

There is no option to continue with an executive pension. Every executive pension must be wound up and transferred out by April next year. The volume of cases will cause absolute chaos. We started moving clients (including my own) out of Executive pensions from January of this year and only have a few stragglers left.

Most of transferring to a PRSA as MT have restricted fund choices and my clients like to continue with their investment strategy.

Standard Life chose not to be in the Executive Pension (Master Trust) market. That was a management decision.

The self-directed options are limited and the costs are higher (depending on fund sizes) but that's down to profitability/demand I'd say.


Gerard

www.execution-only.ie

"There is no option to continue with an executive pension. Every executive pension must be wound up and transferred out by April next year. The volume of cases will cause absolute chaos. We started moving clients (including my own) out of Executive pensions from January of this year and only have a few stragglers left."

I have an exec pension with New Ireland. Current transfer value €1.1m ± I have not contributed to it since July 23. I've left my company, sold the shares and taken retirement relief. I have no immediate home for the TFLS so I've not ARF-ed yet. I do not intend doing so for a few more years at least ( I'm almost 62) Do I need to get working on moving this Exec Pension to another pension structure ?

Are you the Trustee?

I had presumed so but that detail has not appeared on the annual statement since 2022....where it is my company that is listed as the trustee

NotMyRealName said:

"There is no option to continue with an executive pension. Every executive pension must be wound up and transferred out by April next year. The volume of cases will cause absolute chaos. We started moving clients (including my own) out of Executive pensions from January of this year and only have a few stragglers left."

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FYI

NotMyRealName said:

Do I need to get working on moving this Exec Pension to another pension structure ?

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I think New Ireland are moving anyone who doesn't reply to their Master Trust structure.

GSheehy said:

Standard Life chose not to be in the Executive Pension (Master Trust) market. That was a management decision.

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Yes. They are not in the group pension business so did not have the trustee infrastructure. It would cost them millions to put it in place. Then the funding rules on PRSAs were relaxed, so there was no need to make that investment. Even with the current funding restrictions on PRSAs, they are more favourable than the MT as a replacement for one person exec pensions.

@NotMyRealName I'd say they'll be contacting you over the next while with a view to a change in structure. You could look at alternatives but just make sure there are no penalties if you moved away from NI. If you wanted to kick the drawdown date out to 75 you'd have to change product anyway.

@Steven Barrett Yes, but the decision was made when the PRSA funding limits were very flaithiúl, not the 100% of salary figure. The gereral rule of thumb I've seen (on a like-for-like) is that if you're under 40 then funding limits on PRSA are a bit better but the older you get Master Trust wins. But, that's where no previous pension funding has taken place. If substantial funding was in place already then that 40 would move out to 50/55. I'm leaving out the features/anomalies between products here. Probably best for folk to run the figures through a Maximium Funding Calculator at various stages.

GSheehy said:

@NotMyRealName I'd say they'll be contacting you over the next while with a view to a change in structure. You could look at alternatives but just make sure there are no penalties if you moved away from NI. If you wanted to kick the drawdown date out to 75 you'd have to change product anyway.

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No, there's no penalties involved. Not intending to kick out till 75....but you never know. I had intended to use TFLS to help out my 2 young adults when housing is in their sights in a couple of years, maybe. I'm in a very fortunate position, financially, at the moment. Significant rainy day liquidity available, no mortgage and wife due to retire next year with very good DB state pension and TFLS.
What "alternatives" do you mean? My current arrangement has an AMC of .5% ( 2 of my funds have AMC of .75%....they're all my choices. I'm 100% in equities as I de-coupled from the lifestyle fund as few years ago.