98 / 462
g a z e t t e
april
1991
consider that additional provision
should be made for increased
administrative expenses as a result
of the operation of the Act. This
would mean increased funding
wo u l d be required f r om t he
employer.
The Act requires trustees to
prepare an annual report containing
whatever information may be
prescribed, on a yearly basis. This
requirement is distinct from the
requirement to have accounts
audited, but may be compared
to the directors' report to ac-
company the audited accounts of
companies.
The drafting of the Act has
resulted in a practical difficulty in
relation to S.55 which imposes the
requirement to produce the report.
The explanatory memorandum
published wi th the Bill as initiated
i nd i ca t ed t hat dea th bene f it
schemes and " f r ozen" schemes
wou ld be exempt f r om t h is
requirement, However, S.55 (2)
(which expresses the exemption) is
so wo r ded t hat it must be
construed as meaning that a
scheme will be.exempt only if it is
at the same time both a death
benefit scheme and a " f r ozen"
scheme (as opposed to being in
either one category or the other).
Clearly this was an error in the
drafting of the Act.
The trustees are obliged by
s.56(1) to have the accounts of a
scheme audited (for periods as may
be prescribed, but presumably on
an annual basis), to have the
scheme assets valued by the
actuary and, in respect of the audit
and valuation, to have specified
documents prepared (the audited
accounts, auditor's report and
actuary's report). The documents
are specified in sub-section (2).
Then sub-section (6) exempts
certain specified categories of
scheme f r om sub-section (2).
However, the practical difficulty is
that sub-section (6) should have
referred to sub-section (1). The
result appears to be that the
trustees of the scheme in question
would still be obliged to have the
accounts audited and the fund
valued, but not obliged to have
audited accounts, an auditors'
report or an ac t ua r y 's report
prepared. A f u r t her practical
difficulty is that sub-section (6)
suffers from the same drafting error
as that in relation to s.55(2),
namely that it is so worded that it
must be construed as meaning that
a scheme will only be exempt if it
falls within each (not any one of) of
the categories specified in sub-
section (6).
Whiíe section 57 enables the
Minister to modify the extent of the
application of sections 54 (dis-
closure of information), 55 (annual
reports) and 56 (annual accounts
and actuarial valuations) to certain
schemes, it is doubtful whether it
will be possible by regulation to
correct the deficiencies in ss.55
and 56.
Part III of the Act is devoted to
the requirements on trustees to
secure t he p r ese r va t i on of
accumulated benefits for scheme
members. Part IV introduces the
requirement for all schemes, other
. . . it is doubtful if it will be
possible by regulation to correct
the deficiencies in SS.55 and
56."
than defined contribution schemes,
to meet a funding standard, which
will be evidenced by the provision
of actuarial funding certificates
which the trustees are obliged to
procure and submit to the Board.
There is not scope in this article to
deal w i th these requirements in
detail. Suffice it to say that the Act
imposes extensive obligations on
the trustees. However, compliance
by the trustees inevitably will
require co-operation between the
employer conce r ned and t he
actuary to ensure that all the
requirements are complied w i th in
good time. Despite the fact that
failure to comply with these obliga-
tions may not be the trustees' fault,
nevertheless a trustee still faces
the sanction of prosecution for
failure to comply. The Act does not
indicate that a trustee has any
defence on the ground that matters
were beyond his control.
Equal treatment
Part VII introduces the requirement
to secure equal treatment for men
and women in occupational benefit
schemes. No move has been made
to bring this part into operation yet.
It remains to be seen precisely
what impact the judgement of the
European Court of Justice in May
1990 in Case C 262 / 88
Barber -v-
Guardian Royal Exchange
[1990] 2
All ER 660 will have on Irish
pension schemes.
Appointment and removal of
trustees
Under s.63, the High Court may
appoint one or more trustees of a
scheme in substitution for the
existing trustees. This may be done
only on application by the Board by
petition and the court may make an
order only if it considers that the
trustees have failed to carry out the
duties imposed on them by law
(whether under the Act or not) and
that the scheme is being or has
been administered in such a
manner as to jeopardise the rights
and interests of members there-
under. In addition to the powers
conferred on the court, the Board
may appoint new trustees, on the
app l i ca t i on
of
any
person
interested. This power may be
exercised only where there are no
trustees or the trustees cannot be
found and the Board considers it
necessary to make the appoint-
ment. The Act provides for the
vesting of scheme assets in the
new trustees following an appoint-
ment. Where the assets are in
registered form the new trustees
should ensure that a copy of the
order is produced to the relevant
registrar.
Conclusion
The Act imposes numerous duties
and obligations on pension scheme
trustees, confers on them some
rights and discretions and sets
many different time limits wi th
which they must comply. It is clear,
therefore, that the life of such
t r us t ees is going to become
considerably more complicated.
The indifferent trustee faces the
possibility of criminal sanctions for
his indifference. All trustees face a
looming forest of possible inter-
pretation difficulties and detailed
compliance requirements. I believe
that these can be met and most of
the practical difficulties overcome
with the co-operation of all involved
in the establishment and admini-
stration of pension schemes.
However, I question whether all the
anomalies that occur in the Act can
be corrected merely by prescription
or regulation. Against that back-
ground, we all may expect a
challenging future under the Act.
•
8 0