IORP II – green light for good governance
On 23 October 2018, the DWP published two sets of regulations designed to implement the second European Pensions Directive (“IORP II”). Both sets come into force on 13 January 2019.
Ferdinand Lovett, associate director at Sackers, commented: “For all the uncertainty surrounding Brexit, the Government has followed through with its commitment to implement IORP II. In creating a statutory duty for occupational schemes to have an “effective system of governance” including internal controls, this lays down the bedrock on which TPR codes of practice will be built or updated. We do not expect that schemes who already have good governance systems in place will need to make quantum leaps in terms of compliance. But arrangements will need to be reviewed against the codes of practice, when available.
“The Government has made clear that, where possible, it intends to comply with IORP II through existing and planned UK practice and regulation. We understand that TPR will not consult on its codes of practice until next year, and that any changes are unlikely to take effect before late 2019. Trustees should be reassured that the Government has also stated that it intends to give schemes sufficient time for familiarisation and planning.”