IORP II and Standard Life Executive Pension Plans

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Pegasus2

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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?
 
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 ?
 
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
 
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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.
 
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.
 
NotMyRealName said:
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
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Unless you requested a change, then your company is still the trustee of this pension scheme. I note that you sold your shares in the company. Does the company still exist? When you decide to do something with this pension scheme, forms will need to be co-signed on behalf of the trustee.
 
I built my pension using execution-only trading with Standard Life's stockbroker, Stocktrade, and previously Irish Life's stockbroking service. Is there an alternative provider in Ireland that can provide this type of pension?
 

The company still exists.
Since I read Stevens post regarding the winding up of exec pension schemes, my attention was grabbed. Assuming I'm not going the ARF and TFLS in the next few years, my queries are :
* Should I get the trusteeship adjusted?
* Do I just wait till New Ireland contact me with their options?
* Should I get ahead of that and explore @GSheehy 's alternatives, and what are they?
* In all possible events ,is it likely to result in a new contract with different fund choices, AMC and set-up costs?
*
 
NotMyRealName said:
Should I get the trusteeship adjusted?
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You have to get the trustee changed.

There were always trustee responsibilities, which were largely ignored by company directors. The standard has been upped and it is not ignored. Professional trustees are the only show in town. Either move to a master trust or a PRSA. There is no option to stay as is.
 
NotMyRealName said:
* Should I get the trusteeship adjusted?
* Do I just wait till New Ireland contact me with their options?
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Between now and April 2026 you have a number of options if you want to avoid incurring the huge costs of meeting all the new regulations - not viable unless you're running a huge pension scheme.

  • Transfer to a Buy-Out Bond as you're no longer an employee or director of the company. This can be with New Ireland or any other company of your choosing. Retirement options are the same as your Executive Pension. No ability to accept future contributions. IORP rules don't cover Buy-Out Bonds.
  • Transfer to a PRSA with any company you want. Different funding rules and retirement rules to the Executive Pension or Master Trust.
  • Transfer to a Master Trust with New Ireland or any other company offering them.
  • Retire the fund which I note you don't want to do right now.
As many people are facing similar decisions around now, I'm frequently asked what the difference between a PRSA and a Master Trust is. I wrote a short answer to that last year. https://ferga.com/latest-news/f/differences-between-a-master-trust-and-a-prsa

NotMyRealName said:
* In all possible events ,is it likely to result in a new contract with different fund choices, AMC and set-up costs?
Click to expand...

If you transfer to a New Ireland Master Trust, they might offer you the same charges as you have at present. All other options will have different charges, which might be higher or lower than your present structure. Fund choices with New Ireland would be similar across Buy-Out Bonds, PRSAs or their Master Trust.
 
Thank You Liam,

I'm going to contact New Ireland first, to see what their proposal is. I'm surprised that they haven't been in contact with me in view of the relatively short timespan till compliance....or perhaps that's MY responsibility.
I had thought that my next action would be retiring the fund, and going the ARF TFLS route, in the meantime availing of positive fund growth, subject to market fluctuations.
It's unlikely I'll return to paid employment, so additions to the pension pot are not a requirement.
 
NotMyRealName said:
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.
Click to expand...

@NotMyRealName - Thanks for the update. Out of curiosity, are New Ireland offering you the same charges and the same fund choice you already have?
 
"Your policy will migrate to a master trust , nothing else will change its just a case of completing some forms."

Liam, this is from the short email reply from my advisor with New Ireland.
 
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