Dinny McGinley (Donegal South West, Fine Gael) | Oireachtas source

I do not propose to accept this amendment. Procedures for the appointment of trustees are usually set out in the trust deed and rules of a pension scheme. Section 62 of the Pensions Act allows for regulations to be made to provide for member participation in the selection of persons to be appointed as trustees. I understand that, in practice, the provisions of the member trustee regulations are rarely used and the composition of the trustee board is very often agreed at scheme level on a consensual basis.

It should be noted that under existing trust law, all trustees, no matter how appointed, have an obligation to act in the best interests of all members. Trustees cannot act as a representative or advocate for a particular subset from which they are drawn but must serve all classes of beneficiary impartially. In its guidance to trustees, the Pensions Authority reaffirms these principles which are also complemented by the provisions in the Pensions Act.

The current focus in relation to trusteeship is on raising the performance of trustees and proposing minimum standards for trustee education, knowledge, understanding and behaviour that would be considerably more demanding than the current trustee training requirements. This is with a view to supporting best outcomes for all scheme members.

This issue of trusteeship will be considered in the context of evolving pension policy and in particular in the context of the report by the Pensions Authority arising from the defined contribution consultation process, which the Pensions Authority launched in August 2013. I expect the report on this consultation to be with the Minister in early autumn.

Proposals are emanating from the European Commission in relation to amendments to Directive 2003/41/EC on the activities and supervision of institutions for occupational retirement provision. These proposals include enhanced governance structures for pension schemes which have significant impacts on the roles of the scheme trustees. The current proposals require trustees of a pension scheme to hold relevant professional qualifications. Negotiations on these proposals are ongoing and are likely to continue until the end of next year. The Oireachtas Joint Committee on Education and Social Protection was briefed on the proposals to amend the directive. The committee will be kept up to date on progress.

I can assure the House that the Department and the Pensions Authority are committed to ensuring all trustees, irrespective of their origin, administer their schemes in the best interests of all their members and in accordance with the provisions of the Pensions Act. I must stress again that the trustees of a pension scheme are required under trust law to act at all times in the best interests of scheme members, irrespective of whether trustees are appointed under the terms of the trust deed and rules of the pension scheme or whether they are appointed under regulations made under section 62 of the Pensions Act.

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