Social Welfare and Pensions Act, 2011 – Information Note
The Social Welfare and Pensions Act, 2011 was signed into law on 29 June 2011. It makes certain amendments to the Pensions Act, 1990, as amended (“the Act”). It also makes certain changes in relation to the State pension.
Pensions Act Amendments
- Part 4 of the Social Welfare and Pensions Act, 2011 provides for amendments to the Act necessary to implement Article 17 of the IORPS Directive. In brief, Article 17 places an obligation on certain occupational pension schemes and Trust RACs to hold additional reserves where they underwrite death or disability benefits or guarantee a given investment performance or a given level of benefits. These schemes are known as regulatory own funds (ROF) arrangements and a new Part IVB has been inserted into the Act in relation to ROF schemes and Trust RACs.
The Pensions Board and the Department of Social Protection expect that in practice Part IVB will apply to few, if any, schemes or Trust RACs in Ireland because they are not established on the same basis as schemes of the sort contemplated by Article 17 of the IORPS Directive. The Board has published a separate information note on ROF schemes / Trust RACs and Part IVB which can be accessed under ‘Related Documents’.
- Chapter 3 of Part 4 of the Social Welfare and Pensions Act, 2011 makes certain amendments to Part IVA of the Act which was introduced under the Social Welfare and Pensions Act, 2010. The amendments make provision for the certification by The Pensions Board of sovereign annuity policies or contracts of assurance as being suitable for pension purposes. The amendments clarify the responsibility of The Pensions Board in relation to certification of such contracts or policies.
State Pension Amendments
The State pension does not come under the remit of The Pensions Board. However, for general information, it should be noted that the Social Welfare and Pensions Act, 2011 makes certain amendments which impact on the existing State pension provisions. In particular, the State pension (transition) for new claimants will be discontinued with effect from 1 January 2014. This means that there will be a standard State pension age of 66 years for everyone from 1 January 2014. In addition, the Social Welfare and Pensions Act, 2011 provides for an increase in the age for qualification for the State pension from 66 years to 67 years from 2021 and a further increase to 68 years from 2028.