S.I. No. 455 of 2010.
OCCUPATIONAL PENSION SCHEMES (INVESTMENT) (AMENDMENT) REGULATIONS 2010
(This note is not part of the Instrument and does not purport to be a legal interpretation.)
Article 18(1)(f) of Directive 2003/41 EC on the activities and supervision of Institutions for Occupational Retirement Provision (IORPs) prohibits pension schemes from investing more than 5% of their resources in the employer. Where the employer belongs to a group the article provides that investment in the group as a whole shall not represent more than 10% of the resources of the scheme.
The overarching requirements of prudence and appropriate diversification continue to apply which may result in lower self-investment concentration limits than those set out above being appropriate.
These Regulations amend the Occupational Pension Schemes (Investment) Regulations 2006 to 2007 by providing that investments by schemes in their sponsoring employer shall represent no more than 5% of the portfolio as a whole. Where the sponsoring employer belongs to a group, the regulations provide that investment in the employer group, inclusive of the sponsoring employer, shall not exceed 10% of the scheme's resources.
Article 8 permits a higher upper limit of self-investment by small membercontrolled schemes of 20%, subject to the overriding constraints of the prudent person principle.
Article 8 does not apply to one member arrangements.
The definition of self-investment in Article 2 contains a number of carve outs. These include, for example, investments in Government Bonds by public sector schemes and investments in cash deposits with an authorised deposit taking institution.