OFX and WTW join forces to spotlight pensions and employment law
Employers were urged to prepare for retirement and regulatory changes at a recent Breakfast Briefing, jointly hosted by O’Flynn Exhams LLP Solicitors and advisory, broking and solutions company, WTW. At the seminar in Hayfield Manor on October 10th, employers were cautioned to review policies around mandatory retirement age, cybersecurity and governance to meet compliance requirements, and to optimise pension performance. The advice came after recent court rulings and ahead of the implementation of the Digital Operational Resilience Act (DORA) next year.
Managing Partner of O’Flynn Exhams LLP, Shane Crossan outlined why employers must, under the Employment Equality Acts 1998 – 2015, demonstrate that any mandatory retirement age imposed can be reasonably and objectively justified, and said that adopting a generally applicable mandatory retirement age requires consistency. He also indicated that, according to the Workplace Relations Commissions’ 2017 Code of Practice on Longer Working Hours, employees are entitled to due process should they wish to extend their working life beyond the mandatory retirement age operated by their employers. This is a position that will be strengthened by the Employment (Restrictions of Certain Mandatory Ages) Bill 2024, which is designed to allow but not compel employees to work beyond any mandatory retirement age until they reach the State pension age of 66.
Mr Crossan said: “The WRC’s Code of Practice on Longer Working Hours sets out best industrial relations practice in managing the engagement between employers and employees in the run-up to retirement age. These codes of practice are not strictly legally binding but, importantly, account is taken of them by the WRC and the Labour Court in the event of claims coming before them for determination. In my experience, if you are not able to show compliance, you are in trouble.”
Laura Power, Director of Retirement at WTW addressed compliance in the context of the DORA, which is due to come into effect on January 17th, 2025. She said “DORA was designed with large financial institutions, such as insurance companies and banks, in mind and therefore the application to smaller entities, such as pension schemes, can be challenging, particularly due to the fact that pension schemes operate on a primarily outsourced basis. To ensure compliance, Trustees need to ensure that both their own cyber governance structures, and those of any third-party provider, are robust, and that plans are in place in the event of an incident. This will necessitate contract changes and monitoring of providers that support critical or important functions. In addition to this, Trustees will need to build the required annual, triennial and event-driven reviews into their business-as-usual.”
Conor King, Director, Retirement at WTW acknowledged the onerous compliance and governance responsibilities now facing pension schemes but pointed out that if trustees and employers can find efficient ways to manage this increased regulatory burden, it will help them carve out time to think about more strategic matters, which will reap rewards. He said “Defined Benefit schemes are now in a better financial position than they have been in a long time, which gives trustees an opportunity to de-risk and consolidate gains. Similarly, the emergence of master trusts for Defined Contribution schemes can significantly simplify operations, expand member options and reduce costs for employers. With the government’s auto-enrolment scheme being launched in 2025, we would encourage trustees and employers to be proactive rather than reactive to the changes that are coming. By looking at their employee profile and identifying in advance what model is best for their workforce, employers can target their pension spend in a way that delivers the best outcome for members and meets their business’s objectives.”