What is IORP II?
IORP II is an EU Directive that set new requirements for occupational pension schemes. Legislation was passed into law in April 2021 in Ireland. IORP II has changed the occupational pension regulatory landscape, enforcing significant compliance demands on trustees. Trustees of occupational pension schemes are, in general, expected to provide for enhanced administration and governance that will incur substantial ongoing costs to the scheme.
Fulfilling the requirements IORP II legislation imposes will mean a considerable financial cost for the member. If the Trustee decides this is not in the best interest of the member, the Synergy Executive Pension should be wound up and transferred to an alternative arrangement before 22 April 2026.
The options available are:
- transfer to a Personal Retirement Savings Account (PRSA)
- transfer to another occupational pension scheme (including a master trust from another provider)
- transfer to a Buy Out Bond, or
- retire, if the circumstances are right.
You can find more information in Your guide to IORP II.
Synergy Executive pension with Lane Clark and Peacock Trustee Services Ltd (LCP) as trustee
As the fulfilment of IORP II requirements will incur significant additional costs to the member, Lane Clark & Peacock Trustee Services Ltd (LCP), as trustee and Standard Life, as registered administrator have determined the best course of action is to wind up the scheme and transfer to an alternative arrangement. This needs to be completed by 22 April 2026. This means members will not incur the significant additional costs that complying with IORP II requirements would impose.
PRSA – an alternative solution for your customers?
A PRSA can now be used as a whole of life pension arrangement meaning an employee can save for retirement and then draw their retirement income, without the requirement to change products, simply by Vesting the PRSA.
Other reasons to consider a PRSA include:
- Tax-efficient death in service benefits: Payment of the full PRSA policy value to the employee’s estate, where an employee dies in service
- Single relationship solution: There’s no third-party involvement so decision making, reviews and retirement options are all conducted one-to-one between adviser and client
- Simpler funding calculations: Once the maximum yearly employer and employee contribution limits are followed, there are no complicated funding calculations like those under occupational schemes
- Flexible Retirement: The ability to draw down retirement benefits in stages, up to age 75, using multiple PRSAs.
A Synergy PRSA offers an extensive range of product options designed to cater to the ever-evolving needs of our customers and advisers. Visit the Synergy PRSA adviser hub for more information.
We’re writing to customers with Synergy Executive Pensions started before 22 April 2021 as part of a phased mailing which started in May. We highlight the importance of financial advice when making important decisions about pensions, and your business manager can provide you with a list of your impacted policies to help support these conversations.