The Gazette 1991

g a z e t t e

april

1991

As far as trustees are concerned, probably the principal provisions of the Act relating to the Board are those contained in section 18 (which authorises any employee of the Board to inspect or investigate the state and conduct of a scheme) and section 25 (which requires trustees to pay to the Board yearly fees as the Minister prescribes with the consent of the Minister for Finance). The entire operation of a scheme may be inspected and investigated by a Board repre- sentative. The employer and the trustees concerned are obliged to furnish such information, explana- tions, books of account and other documents as may be specified by the Board (or the authorised person on its behalf). The Board's repre- sentative is specifically empowered to enter the premises of any employer, trustee or agent and make such examination or enquiry as may be necessary. The duties of producing or providing information, documents, material or explanation extend to any person being an officer or employee of the employer or a trustee or agent. These ex- tensive powers are given some teeth by the express provision that obstruction of a Board's repre- sentative, refusal to produce information, documents, material or explanation and refusal to answer any questions are all offences, conviction for which renders the person liable, on summary conviction, to a fine of up to £1,000 or one year's imprison- ment or both or, on conviction on indictment, to a fine of up to £10,000 or to imprisonment of up to t wo years or both. In view of section 25 referred to above, pension schemes will be expected to defray part of the costs of the Board's operations. The Minister is empowered to advance moneys to the Board wi th the consent of the Minister for Finance, so to some extent the Board's operations may be funded from the Éxchequer. It is not clear yet to what extent the Board's operations will be funded by fees charged on pension schemes. The Act recognises that there may be conflicts between the provisions of any scheme and the provisions of the Act contained in Part III (preservation of benefits), Part IV (funding standard) and Part V (disclosure of information in

(d) to advise the Minister on standards for trustees and implementation of them; (e) to publish annual reports and other reports; and (f) to perform such tasks as the Minister may request (these are not specified). In addition under s.11 (1) (a) the Minister may by order, w i th the consent of the Minister for Finance, confer on the Board such additional functions, connected w i th the functions above, as he considers appropriate; and, by order wi th the same consent, the Minister may make " s u ch provision as he considers necessary or expedient in relation to matters ancillary to or arising out of . . . " t hose functions. The Act also confers on the Board " s u c h powe rs as are necessary for or incidental to the performance of its functions", without specifying what these are. In addition the Board has power, under s.3(5), to institute summary proceedings to prosecute for offences under the Act. Trustees may take confort from the fact that the composition of the Board is broadly based and consists of a chairman and twelve ordinary membe r s, appo i n t ed by t he Minister. Seven of the ordinary members must be representative of the different interests, namely trades union, employers, occupa- tional pension schemes ( two members), the actuarial profession, the accounting profession and the legal profession. One member is to be a representative of the Minister and another to be a representative of the Minister for Finance, leaving three further ordinary members to be appointed by the Minister without necessarily representing any particular interest. As has been reported in the press, the Minister has established the Board and appointed all its members with Mrs. Mary Broughan as chairman. Undoubtedly the decisions of the Board are likely to have a consider- able impact on the performance by t r us t ees of t he ir du t i es and responsibilities. While the Board does have a function to issue guidelines and codes of practice as indicated above, neither the guide- lines nor the codes of practice are expressed to be binding upon trustees.

ments are actually working, (d) To ensure that proper member- ship and financial records are kept. The Act does not assist trustees by indicating what are " p r ope r" records, but they should be sufficient to allow an audit to be done. I believe it is possible that trustees could find themselves in a position where, through no fault of their own, they are not in a position to comply fully wi th these general duties. The existénce of guidelines or codes of practice issued by the Board may be of assistance to the trustees, but may not necessarily relieve them from responsibility under this section 59. While other parts of the Act contain provisions which are intended to resolve con- flicts under the rules of a scheme and the Act, there is no such provision in Part VI (which deals w i th trustees generally). The point I wish to make is that, in the circumstances of a particular case, "The existence of guidelines or codes of practice issued by the Board . . . may not necessarily relieve [trustees] from res- ponsibility under . . . section 59." compliance w i th one of these general duties might prove not to be possible in practice, so that theoretically a trustee then would be liable to prosecution for an offence under the Act. Before considering some of the many specific duties of trustees under the Act, it may help to consider the Pensions Board, the activities of which will have a profound impact on the life of trustees. The Pensions Board The Board's functions are specified in s.10 and will include: (a) to monitor and supervise the operation of the Act and advise the Minister for Social Welfare ("the Minister") on the Board's functions and on pensions developments generally; (b) to issue guidelines on the duties and responsibilities of trustees and codes of practice on specific aspects of those responsibilities; (c) to encourage the training of trustees;

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