Cross-border schemes

This section provides information on the requirements for occupational pension schemes and trust RACs (schemes) operating ‘cross-border’ in Ireland.

Part XII of the Pensions Act allows schemes established in one Member State to accept, subject to certain conditions, transfers from schemes established or based in another Member State and contributions from employers whose relationship with their employees is governed by the social and labour law relevant to pensions of another Member State.

The European Union (Occupational Pension Schemes) Regulations, 2021 introduced operational changes to the existing cross-border provisions in the Pensions Act. These include requiring the Pensions Authority to give reasons for a decision not to grant approval to accept cross-border contributions from a particular employer and trustees now have appeal rights to the High Court in respect of this decision.

Irish schemes that want to operate cross-border

Trustees of Irish based schemes must apply to the Authority for authorisation before they can operate cross-border. Furthermore, before the trustees of an Irish scheme can begin accepting contributions from an overseas scheme, the trustees must notify the Authority within one month and supply the Authority with certain information, which is set out in regulations, about that overseas scheme. The Authority will assess the information and decide whether to give approval. When making the decision, the Authority must have regard to the administrative structure and financial position of the receiving scheme, as well as the fitness and probity of the scheme’s trustees.

A scheme based in another Member State that accepts a transfer from an Irish scheme must comply with Irish social and labour law relevant to Irish pension schemes in respect of the ‘cross-border members’, affected by the transfer. These laws are referred to as the ‘relevant statutory requirements’ in Irish law. In brief, these are Part III of the Pensions Act (Preservation of Benefits), Part V of the Pensions Act (Disclosure of Information), section 59B of the Pensions Act (Reduction in Benefit) and section 59C of the Pensions Act (Increases to Pensions in Payment).

Irish schemes accepting cross-border transfers and contributions

Trustees of Irish schemes who accept cross-border contributions or transfers must comply with the social and labour laws relevant to schemes, and the information and investment requirements of the other or ‘host’ Member State in respect of the cross-border members e.g., the Irish trustees must disclose information to the members in accordance with the information rules of the other Member State. The social and labour law relevant to pensions varies across Member States.

UK/Ireland cross-border update

The Occupational Pension Schemes (United Kingdom Members) Regulations, 2020 (S.I. No. 717/2020) (the Regulations) came into effect on 31 December 2020. Following the end of the transition period for the United Kingdom (UK) withdrawal from the European Union (EU), UK social and labour law provisions no longer apply to UK members of Irish occupational pension schemes.

The purpose of the Regulations is to amend the Pensions Act to ensure that commencing 1 January 2021, the relevant provisions of the Pensions Act apply to Irish occupational pension schemes with UK members, for the benefit of the UK members. Effectively, the Regulations extend Irish social and labour law provisions to the UK members of Irish schemes. In brief, these are Part III of the Pensions Act (Preservation of Benefits), Part V (Disclosure), section 59B (Reductions in Benefits) and section 59C (Increases to Pensions in Payment).

For further information on the Regulations see Occupational Pension Scheme (United Kingdom Members) Regulations 2020.

Separately, amendments made to the Taxes Consolidation Act, 1997 (as amended) contained in the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act, 2020 (No. 23) have also come into effect. This means that Irish occupational pension schemes with UK members continue to have exempt approved status and remain eligible for tax relief on the basis that they have received authorisation and approval from the Pensions Authority pursuant to Part XII of the Pensions Act, to accept contributions from an EU undertaking (including the UK), in respect of EU members (including the UK) and this authorisation has not been revoked.

Therefore, under Irish revenue and pensions legislation there is no barrier to Irish schemes with UK members continuing to accept contributions in respect of those UK members. Furthermore, the amendments to the Taxes Consolidation Act, 1997 also ensures that pension contributions to UK occupational pension schemes by Irish employers continue to qualify for tax relief.

Following the end of the Brexit transition period, the Pensions Regulator in the UK developed guidance for UK cross-border pension schemes and UK employers that are contributing to occupational pension schemes established outside the UK. This guidance can be found here.

Further information

If a scheme wishes to engage in cross-border activity, it should seek further information and the appropriate application forms from the Authority by contacting info@pensionsauthority.ie.