Short title, collective citation, construction and commencement.
(1)
This Act may be cited as the Pensions (Amendment) Act, 2002 .
(2)
The Principal Act, the Pensions (Amendment) Act, 1996 , and this Act may be cited together as the Pensions Acts, 1990 to 2002, and shall be construed together as one.
(3)
This Act shall come into operation on such day or days as the Minister may appoint by order or orders either generally or with reference to any particular purpose or provision and different days may be so appointed for different purposes or different provisions.
(4)
Without prejudice to the generality of the foregoing, different days may be so appointed for the coming into operation of section 3 of this Act as respects different provisions of the Part inserted in the Principal Act by that section.
2-
Definitions.
In this Act—
“Minister” means the Minister for Social, Community and Family Affairs;
The Principal Act is amended by the insertion of the following Part after Part IX—
“Part X
Personal Retirement Savings Accounts
Interpretation (Part X).
91.
(1)
In this Part, unless the context otherwise requires—
‘administrator’ means a person to whom a PRSA provider delegates in pursuance of this Part its administrative functions in relation to a PRSA;
‘applicant’ means a person who applies for approval of a PRSA product under section 94;
‘Central Bank’ means the Central Bank of Ireland;
‘charges’ includes—
(a)
fees, levies or penalties imposed by the PRSA provider;
(b)
fees, levies or penalties imposed or made on or in relation to any pooled fund held for the purposes of a PRSA and on or in relation to any pooled fund held within such a pooled fund;
(c)
the net proceeds of the process commonly known as stocklending (involving the sale of assets with an agreement for repurchase) of the assets held (including those held within any pooled fund and any pooled fund held within such a pooled fund) for the purposes of a PRSA that do not accrue to the PRSA contributor;
(d)
the proceeds of any rounding of unit prices of the pooled funds held for the purposes of a PRSA and on any pooled fund held within those pooled funds that do not accrue to the PRSA contributor;
(e)
any deductions from the assets to meet the costs of auditors or custodians, including such deductions from the assets of the pooled funds held for the purposes of a PRSA and from any pooled fund held within those pooled funds;
(f)
any value-added tax on the charges;
(g)
the costs of transactions in investments (including transactions of investments held within any pooled fund and any pooled fund held within those pooled funds) that are incurred in excess of those that would be incurred on a competitive arm's length basis;
(h)
any reduction in the interest rate received on deposits or investment return obtained on other assets below that which would be obtainable on a competitive arm's length basis from other comparable deposits or assets;
(i)
any deduction from the PRSA assets or a contribution for the benefit of the PRSA provider, any intermediary, including an investment business firm authorised under the Investment Intermediaries Act, 1995 , or a member firm authorised under the Stock Exchange Act, 1995 , or the employer;
(j)
the charges on any insurance contract held as a PRSA asset that would be included within illustrations of projected benefits produced in accordance with the Life Assurance (Provision of Information) Regulations 2001 ( S.I. No. 15 of 2001 );
(k)
such amounts in respect of such other matters as may be prescribed;
but does not include—
(i)
any stamp duty or other similar turnover taxes or levies imposed by or under any enactment that have been charged or made in relation to the purchase or sale of investments;
(ii)
any irrecoverable withholding taxes on investment income;
(iii)
any fees or levies imposed by or under any enactment that are deducted from the assets of the PRSA contributor or from the assets of the pooled funds held for the purposes of a PRSA and from any pooled fund held within those pooled funds;
(iv)
the costs of transactions in investments (including those held within any pooled fund and any pooled fund held within those pooled funds) that are incurred on a competitive arm's length basis;
(v)
the costs of routine property maintenance and collection of rents due in respect of property investments (including those held within any pooled fund and any pooled fund held within those pooled funds) incurred on a competitive arm's length basis;
(vi)
where an insurance contract is held as a PRSA asset, any deductions made solely for the purposes of smoothing the investment returns allocated to individual policies;
(vii)
such amounts in respect of such other matters as may be prescribed;
and ‘charge’ shall have a similar meaning;
‘collective investment scheme’ means—
(a)
a unit trust scheme authorised by the Central Bank under the Unit Trusts Act, 1990 ;
(b)
a designated investment company authorised by the Central Bank under Part XIII of the Companies Act, 1990 ;
(c)
a collective investment scheme authorised by the Central Bank under the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 1989 ( S.I. No. 78 of 1989 );
(d)
a collective investment scheme established in another Member State that has been authorised in accordance with Council Directive 85/611/EEC of 20 December 1985;
(e)
the business of an investment limited partnership established under the Investment Limited Partnerships Act, 1994 ; or
(f)
any other collective investment scheme established in another state, the marketing of the units of which to members of the public in the State is approved by the Central Bank;
but does not include a collective investment scheme that is marketed solely to investors of such class or classes as may be determined by the Central Bank;
‘contribution’ means a payment made directly or indirectly by or on behalf of a contributor to the relevant custodian account of a PRSA provider for investment on the contributor's behalf in accordance with the terms of a PRSA contract;
‘contributor’ means an individual who enters into a PRSA contract with a PRSA provider and shall include an individual in whose name a PRSA contract is concluded by the trustees of a scheme for the purpose of distributing the appropriate assets of the scheme on a winding-up;
‘Court’ means the High Court;
‘credit institution’ means a credit institution within the meaning of Article 1 of Directive 2000/12/EC of the European Parliament and of the Council of 20 March 2000, relating to the taking up and pursuit of the business of credit institutions;
‘custodian’ means—
(a)
a credit institution authorised to carry on business in the State with a paid-up share capital of at least €6.35 million or its equivalent in foreign currency; or
(b)
a branch, established in the State, of a credit institution with a paid-up share capital of at least €6.35 million or its equivalent in foreign currency; or
(c)
a company incorporated in the State which—
(i)
is wholly owned by a credit institution provided the liabilities of the custodian are guaranteed by the said credit institution and the said credit institution has paid-up share capital of at least €6.35 million or its equivalent in a foreign currency; or
(ii)
is wholly owned by an institution in a state other than a Member State which is deemed by the Central Bank to be the equivalent of a credit institution to which the Directive would apply, provided the liabilities of the custodian are guaranteed by the said institution and the said institution has a paid-up share capital of at least €6.35 million or its equivalent in a foreign currency; or
(iii)
is wholly owned by an institution or company either in a Member State or in a state other than a Member State which is deemed by the Central Bank to be an institution or company which provides contributors with protection equivalent to that provided by a custodian under paragraph (a) or (b) of this definition or subparagraph (i) or (ii) of this paragraph and provided the liabilities of the company acting as custodian are guaranteed by the said institution or company and that institution or company has a paid-up share capital of at least €6.35 million or its equivalent in a foreign currency;
and which receives and holds the assets of Personal Retirement Savings Accounts by virtue of a custodian contract;
‘custodian account’ means a financial arrangement under which a custodian keeps in its custody the cash, securities and other assets (other than assets consisting of a policy of insurance or units or shares in a collective investment scheme) being all the cash, securities and other assets that have been remitted under a PRSA contract to the custodian (and, for the purposes of this Part, a custodian account may include the use by the custodian of other financial institutions, sub-custodians or nominees for the safekeeping of the said cash, securities and other assets);
‘custodian contract’ means a contract concluded between a PRSA provider and a custodian whereby contributions and all other assets of a PRSA (other than assets consisting of a policy of insurance or units or shares in a collective investment scheme) are transmitted to the custodian to hold on behalf of the PRSA provider;
‘default investment strategy’ means an investment strategy established by a PRSA provider, in accordance with section 103, for the investment of the contributions of contributors;
‘investment manager’ means—
(a)
an investment firm authorised in accordance with Council Directive 93/22/EEC of 10 May 1993 by a competent authority where the firm's authorisation permits it to engage in the proposed activities as an investment manager under this Part; and
(b)
an insurance undertaking authorised to transact insurance business in the State, whether by establishment, branch or provision of services, that falls within any of the Classes of Insurance I, III or VII as set out in the Annex to the Council Directive 79/267/EEC of 5 March 1979; and
(c)
a credit institution,
and to whom a PRSA provider has by contract delegated in whole or in part its investment functions under this Part (but such delegation shall, in the case of an undertaking referred to in paragraph (b) of this definition, be restricted to activities comprising the effecting and carrying out of life assurance policies);
‘payroll deduction’ means a deduction from the salary or wages of an employee for the purposes of making contributions in respect of the employee to a PRSA;
‘Personal Retirement Savings Account’ or ‘PRSA’ means a personal retirement savings account established by a contributor with a PRSA provider under the terms of a PRSA contract;
‘Personal Retirement Savings Account actuary’ or ‘PRSA actuary’ means a person who is employed by a PRSA provider or has entered into a contractual arrangement with a PRSA provider to provide actuarial services in respect of a PRSA product or products and who complies with such requirements for such employment or such appointment as such an actuary as the Minister may determine from time to time and specifies in regulations;
‘Personal Retirement Savings Account assets’ or ‘PRSA assets’ means the assets held on behalf of a contributor in a PRSA and includes the value of any contributions made to that PRSA by any employer of the contributor;
‘Personal Retirement Savings Account contract’ or ‘PRSA contract’ means a contract entered into between a PRSA provider and a contributor in respect of a PRSA product which contract complies with this Part;
‘Personal Retirement Savings Account product’ or ‘PRSA product’ has the meaning assigned to it by section 102;
‘Personal Retirement Savings Account provider’ or ‘PRSA provider’ means—
(a)
an investment firm authorised in accordance with Council Directive 93/22/EEC of 10 May 1993 by a competent authority where the firm's authorisation permits it to engage in the proposed activities as such a provider under this Part; and
(b)
an insurance undertaking authorised to transact insurance business in the State, whether by establishment, branch or provision of services, that falls within any of the Classes of Insurance I, III or VII as set out in the Annex to the Council Directive 79/267/EEC of 5 March 1979; and
(c)
a credit institution,
which produces, markets or sells Personal Retirement Savings Account products;
‘pooled fund’ means—
(a)
a collective investment scheme; or
(b)
an internal linked fund the benefit of which is made available by means of a contract of insurance of an insurance undertaking authorised to transact investment business in the State, whether by establishment, branch, or provision of services, that falls within Class III as set out in the Annex to the Council Directive 79/267/EEC of 5 March 1979;
‘Standard Personal Retirement Savings Account’ or ‘Standard PRSA’ means a PRSA expressed, in the PRSA contract relating to it, to be a ‘Standard Personal Retirement Savings Account’ or ‘Standard PRSA’;
‘Statement of Reasonable Projection’ has the meaning assigned to it by section 116.
(2)
Without prejudice to subsection (5), a notice, direction or other document under this Part or regulations made thereunder shall, unless otherwise specified in this Part or the regulations concerned and subject to subsection (3), be addressed to the person concerned by name and may be served on or given to the person in one of the following ways—
(a)
by delivering it to the person, or
(b)
by leaving it at the address at which the person ordinarily resides or, in a case in which an address or a service has been furnished, at that address, or
(c)
by sending it by post in a prepaid letter to the address at which the person ordinarily resides or, in a case in which an address or a service has been furnished, to that address, or
(d)
in the case of an officer or employee of a PRSA provider, whether authorised to receive the notice, direction or other document concerned or not, by sending it to him by post in a prepaid letter to the address of the principal office of that PRSA provider.
(3)
Where a notice, direction or other document under this Part or regulations made thereunder is to be served on or given to a person who is the owner or occupier of land and the name of the person cannot be ascertained by reasonable inquiry, it may be addressed to the person by using the words the owner or, as the case may require, the occupier.
For the purposes of subsection (2), a company within the meaning of the Companies Acts, 1963 to 2001, shall be deemed to be ordinarily resident at its registered office, and every other body corporate and every unincorporated body shall be deemed to be ordinarily resident at its principal office or place of business.
References in this Part (other than in section 112(1), in so far as it relates to the furnishing of the information concerned under paragraph (a) thereof, and section 114(1)) to the provision of information by a PRSA provider to a contributor or a person referred to in section 111(1) (a ‘prospective contributor’) shall, unless the context otherwise requires, be construed as including references to the provision of the information by the PRSA provider to the contributor or prospective contributor—
(a)
by means of any electronic method,
(b)
by means of telephone, or
(c)
by any other means provided for in the PRSA contract concerned or as may otherwise be agreed between the provider and the contributor or prospective contributor,
but the use of any of those means for that purpose shall not relieve the provider of the obligation to ensure that the contributor or prospective contributor receives the information.
Application required for approval of PRSA product.
92.
(1)
A person who wishes to produce, market or sell a PRSA product shall make an application to the Board and the Revenue Commissioners for the grant, under section 94, of approval by the Board and the Revenue Commissioners of the product.
(2)
The approval of a PRSA product under section 94 shall not constitute a warranty as to the solvency of the person who will produce the product and neither the Board nor the Revenue Commissioners shall—
(a)
be liable in respect of any losses incurred through the insolvency or default of a person who produces a product that has been so approved, or
(b)
have any duty to any contributor regarding the investment performance of a PRSA product.
Procedures for the granting of approval of PRSA products.
93.
The procedures to be followed in respect of the granting of approval of PRSA products under section 94 shall be determined by the Board.
Grant of approval of a PRSA product and code of conduct.
94.
(1)
An application for approval of a PRSA product under this section shall—
(a)
be made in writing and signed by two directors of the applicant and be in such form and contain such particulars as the Board and the Revenue Commissioners may from time to time determine, and
(b)
be accompanied by a certificate provided by a PRSA actuary and two directors of the applicant stating that it is the opinion of the actuary and those directors that the product complies with the requirements of this Part and any regulations made under section 103(2).
(2)
A product shall not be approved under this section by the Board unless the applicant satisfies the Board—
(a)
that the product complies with the requirements of this Part and any regulations made under section 103(2).
(b)
that, as regards the producing, marketing or selling by the applicant of the product, the applicant—
(i)
has adequate levels of expertise to carry on those activities,
(ii)
will establish and follow proper procedures so as to enable the Board to be supplied with all information necessary for the performance by the Board of its supervisory functions in relation to those activities and to enable members of the public to be supplied with any information which the Board may specify, and
(iii)
has organised the structure of its business, in so far as the carrying on of those activities is concerned, in a manner that will facilitate the Board in performing its supervisory functions in relation to those activities, and
(c)
in case the applicant is an undertaking referred to in paragraph (b) of the definition of ‘PRSA provider’ in section 91(1), the activities referred to in paragraph (b)(i) will be carried on solely for the purpose of the effecting and carrying out by it of life assurance policies.
(3)
A product shall not be approved under this section by the Revenue Commissioners unless—
(a)
the Board has notified them that it has approved the product under subsection (2), and
(b)
in accordance with the provisions of Chapter 2A (inserted by section 4 of this Act) of Part 30 of the Taxes Consolidation Act, 1997 , they approve the product for the purposes of this subsection.
(4)
If an application for approval under this section relates to two or more products, the Board and the Revenue Commissioners may approve or refuse to approve one or more of the products as they consider appropriate.
(5)
The Board shall prepare, and amend from time to time as it considers appropriate, a code of conduct with respect to the producing, marketing and selling by PRSA providers of PRSA products and may attach to any approval granted by it and the Revenue Commissioners under this section (whether at the time of the grant of approval or any time thereafter) a condition requiring the relevant PRSA provider to comply, in respect of the product, with the code.
(6)
In preparing a code under subsection (5), the Board shall have regard to—
(a)
the need to provide for the protection of PRSA contributors, and
(b)
the need to provide for effective supervision of the producing, marketing and selling of PRSA products.
Misleading statements.
95.
Any person who, in purported compliance with section 94(1), makes a statement knowing it to be false or misleading in a material particular shall be guilty of an offence.
Application requirements.
96.
(1)
An applicant shall comply with the following provisions—
(a)
the applicant shall, unless it has satisfied the Board that it intends to provide and is capable of providing such a service itself, enter into a contractual arrangement with one or more investment managers to provide an investment service in respect of its PRSA product or products in accordance with this Part in the event that those products are approved by the Board,
(b)
the applicant shall enter into a contractual arrangement with an auditor to provide services for the purposes of section 118 in respect of the applicant's PRSA products in the event that those PRSA products are approved by the Board,
(c)
the applicant shall, unless it has satisfied the Board that it intends to provide and is capable of providing such services itself, enter into a contractual arrangement with one or more administrators to provide administration services in respect of its PRSA product or products in accordance with this Part in the event that those products are approved by the Board,
(d)
unless the applicant employs a PRSA actuary under a contract of service, the applicant shall enter into a contractual arrangement with a PRSA actuary to provide services in respect of the applicant's PRSA product or products and its business in accordance with this Part in the event that those products are approved by the Board,
(e)
subject to subsections (2) and (3), the applicant shall enter into a custodian contract with one or more than one custodian to hold moneys paid by or on behalf of PRSA contributors in accordance with this Part under PRSA contracts and the PRSA assets relating to those PRSA contracts in the event that the applicant's PRSA products are approved by the Board,
(f)
the applicant shall, at the time of application, pay to the Board such fee as may be prescribed.
(2)
If the PRSA provider is an undertaking referred to in paragraph (b) of the definition of ‘PRSA provider’ in section 91(1) (and, accordingly, its activities as such a provider are confined to activities for the purposes of the effecting and carrying out by it of life assurance policies)—
(a)
paragraphs (b) and (e) of subsection (1) shall not apply to it, and
(b)
the definition of ‘contribution’ in section 91(1), and section 107(2) and subsections (3), (4) and (5) of section 121 shall, in relation to it, apply as if the references in that definition and that section and those subsections to ‘the relevant custodian account of a PRSA provider’ were references to ‘a PRSA provider’.
(3)
If a PRSA provider satisfies the Board that it is capable of providing the services referred to in paragraph (e) of subsection (1) in respect of its PRSA products and that it intends to do so, that paragraph (e) shall not apply to it.
(4)
All information concerning the structure of any PRSA and description of any PRSA product which an applicant intends to market and sell as the Board may require shall be submitted to the Board at the time of application for approval of the PRSA product.
(5)
The Board may at any time prior to the grant or refusal of approval of a PRSA product request the applicant to furnish further information to it in relation to the application.
(6)
An applicant shall be informed by the Board whether or not approval of the PRSA product concerned has been granted by it—
(a)
within 3 months after the receipt of the application, or
(b)
where further information in relation to the application has been sought by the Board under subsection (5), within 3 months after the receipt by the Board of the further information.
(7)
(a)
Where the Board refuses an application for approval under section 94 the applicant may appeal to the Court in a summary manner against that refusal.
(b)
The sole ground upon which such an appeal may be taken is that the Board, did not, in a material respect, comply with the requirements of this Part or regulations in dealing with the said application.
(c)
On the hearing of such an appeal, the Court—
(i)
if it is satisfied that the said requirements have been complied with, shall confirm the decision of the Board, and
(ii)
if it is satisfied that the said requirements have not been complied with in any material respect, shall set aside the decision of the Board and remit the matter to the Board who shall thereupon reconsider the matter and make a decision in accordance with those requirements.
