S.I. No. 501/2002 - Personal Retirement Savings Accounts (Disclosure) Regulations, 2002

1. The Written Statement shall include with equal prominence a summary of the advantages and the disadvantages of transferring from the scheme to the PRSA.

2. The Written Statement shall contain a financial analysis which explains the decision to transfer from the scheme to the PRSA.

3. The Written Statement shall:-

(a) identify all the rights and benefits available to the person under the scheme and carefully consider the effect of replacing them with the benefits available under the PRSA; the following factors shall be taken into account relating to the scheme:-

(i) spouse's, dependants' and children's pensions;

(ii) early retirement provision, including retirement on ill health;

(iii) revaluation rates both in deferment and payment, whether they are guaranteed or discretionary (and if discretionary, whether likely to continue);

(iv) ancillary benefits (including tax free cash or lump sum death benefits);

(v) transfer club arrangements, where applicable;

(vi) the member's contribution and the employer's contribution;

(vii) benefits on leaving service;

(viii) whether or not eligibility for other benefits, such as medical or health insurance, is dependent on being a member of the scheme, and

(ix) the financial security of the scheme, by reference (for example) to the last actuarial statement or the most recent trustees' report and accounts;

(b) take into account the following additional factors:-

(i) whether or not the employer would contribute to the PRSA, and

(ii) the charging structure of the PRSA and its impact on transfer values in early years,

(c) in the case of a proposed transfer from a defined benefit scheme to a PRSA the following additional factors shall be taken into account and dealt with in the Written Statement:-

(i) the different investment risks of a PRSA and a defined benefit scheme;

(ii) the impact of fluctuations in annuity rates on the size of the eventual benefit;

(iii) any reduction in immediate death benefits; and

(iv) a transfer value analysis including an indication of the rate of the growth needed to ensure that the person is no worse off as a result of any transfer and

(d) in addition to the factors referred to at subparagraphs (a) to (c), the following additional factors concerning the person concerned should be considered in the Written Statement:-

(i) the possibility of incurring early transfer penalties and new charges; and

(ii) how the transfer affects the investment risk.

GIVEN

under the Official Seal of the Minister for Social and Family Affairs, this 7th day of November, 2002

Minister for Social and Family Affairs.

EXPLANATORY NOTE

[This note is not part of the Instrument and does not purport to be a legal interpretation]

These Regulations govern the disclosure of information to be made by or on behalf of a PRSA provider both prior to the conclusion of a PRSA contract and at specified times after a PRSA contract has been concluded.

Section 111

of the

Pensions Act, 1990

, as amended by the

Pensions (Amendment) Act, 2002

, provides for the issue of a Preliminary Disclosure Certificate (PDC) to specify, inter alia, the level of benefits which the person could reasonably expect to receive. The PDC must be issued prior to the conclusion of a PRSA contract. Section 112 provides for a Statement of Reasonable Projection to be issued at conclusion of the contract and annually, containing more specific information as to the projected level of benefits. These Regulations provide for the form, content and the manner of preparation of those forms.

Section 113(4) of the Pensions Act provides that a PRSA provider cannot accept a transfer of funds from an occupational pension scheme unless a Certificate of Comparison and Written Statement has issued to the contributor. The certificate sets out the comparison of benefits as between the scheme and the PRSA and the statement sets out the reasons why such a transfer is or is not in the interest of the person wishing to make such a transfer. These regulations prescribe the form and content and the manner of preparation of the certificate and the statement.

Section 113 also provides that the person preparing such certificates or statements must have professional indemnity insurance, the amount of which is set in these Regulations at €1,000,000 per claim

4. Warnings

(a) The statement shall contain the following warning notices:-

“WARNINGS

The value of your assets and accordingly, the level of your benefits will depend upon the value of the underlying investments of the PRSA and the income which they earn. These values are not guaranteed, and may fall from time to time, as well as rise.

It is important to make adequate provision for retirement. This PRSA is intended to provide benefits over the duration of your life from retirement and it should be viewed as a long term investment.”.

(b) The statement for a PRSA other than a Standard PRSA shall contain the following additional warning notice:-

“It is recommended that you seek professional financial advice about the nature of this PRSA contract.”.

5. Social Welfare Pension

The statement shall contain the following paragraph completed appropriately:-

“At the date of this Statement the Old Age (Contributory) Pension payable under the

Social Welfare (Consolidation) Act, 1993

to a single person who is qualified to receive the maximum rate amounts to €______ and equates to [______%] [ ] percentage of the latest yearly figure for gross average earnings as published by the Central Statistics Office for all industrial workers in all industries.”.

6. Certificate

The Statement of Reasonable Projection shall contain the following words at the end of the statement:-

“This Statement of Reasonable Projection has been prepared under the provisions of

sections 112

and

116

of the

Pensions Act, 1990

on the [date]:-

Signed:_______________________________________

(Name of Director)

___________________________________

(Name of Provider and address of registered office)

Date _________________________________________”.

PART II

CANCELLATION NOTICE TO BE INCLUDED IN STATEMENT OF REASONABLE PROJECTION FURNISHED FOR PURPOSES OF SECTION 112(2)(a) OF THE PENSIONS ACT, 1990

Article 4

(3)

“This contract is not enforceable until a period of 15 days has elapsed from the date on which you are given this Statement of Reasonable Projection and you may cancel this PRSA contract without penalty if you give written notice to this effect in the form set out below within 15 days of receipt of this Statement.

To: [name of PRSA provider]

[address of PRSA provider]

I hereby give notice in accordance with my rights under Part X of the

Pensions Act, 1990

to cancel the PRSA contract to which this notice relates.

Signed ___________________________________

Dated ____________________________________”.

PART III

Article 4

(3)

7. Cooling Off Period

Under this heading the certificate shall contain, in a prominent position, the following words:-

“This contract is not enforceable until a period of 15 days has elapsed from the date on which you are given a Statement of Reasonable Projection and you may cancel this contract at any time during that period.”.

8. Certificate

The Preliminary Disclosure Certificate shall contain the following words at the end of the certificate:-

“This Preliminary Disclosure Certificate has been prepared under the provisions of

section 111

of the

Pensions Act, 1990

for disclosure in connection with this PRSA on [date]. This PRSA is not a Standard PRSA.

Signed: _____________________________

(Name of Director)

_______________________________

(Name of Provider and address of registered office)

Date: _________________________________”.

PART III

ADDITIONAL WARNING NOTICES REQUIRED BY ARTICLE 3(4)

Article 3

(4)

The Minister for Social and Family Affairs, in exercise of the powers conferred on her by

sections 5

111

,

113

,

115

and

116

of the

Pensions Act, 1990

(No. 25 of 1990), hereby makes the following Regulations:-

Citation