The Pensions Authority have launched a consultation on investment rules for PRSAs. They are concerned about the disparity between investment rules of PRSAs and occupational pension schemes and believe the rules should be more closely aligned.
After IORPS II was transposed in Ireland, all company paid pension plans have the same investment rules, no matter the size of the scheme. The Pensions Authority find it difficult to justify not extending such safeguarding measures to PRSAs.
The Pensions Authority noted that there is an almost been an almost fivefold increase in the number of new non-standard PRSA contracts. There is nothing nefarious about this.
For a starter, one person company pensions were closed, so something had to replace it. The loosening of contribution rules (rowed back after 2 years) meant PRSAs were the pension product of choice for most company contributions. Some providers, like Standard Life and Royal London, only offer non standard PRSAs. They are able to offer a wider range of charging structures under the non standard contracts, many of them being a lot cheaper than the standard PRSA.
Non standard PRSAs also offer a wider fund choice than the standard contract which tends to have a more restrictive choice.
The Pensions Authority view is PRSA providers should be required to ensure assets are invested predominantly in regulated markets and in a manner that ensures diversification.
This is an area I wholly agree with. PRSAs are regulated products. There are lots of unregulated investments that can be invested through PRSAs. Do all policyholders know they their investment isn’t regulated? When things go wrong with these investments, what way is the failed product dealt with by the authorities?
Clients are better protected if they know that only regulated investments can be used in regulated pension products. This will mean that purchasing property through a pension will be banned.
There are trustee obligations on investments in Master Trusts. A PRSA is a contract between the provider and the policyholder. The trustee obligations simply do not apply in PRSAs. People like the investment freedom that they are afforded under PRSAs. This should remain…in regulated investments. If someone wants to invest in a regulated gold etf, they should be allowed to. Most PRSA investors get financial advice, something that is not provided to most scheme members who just have online access to their pension account and no access to an advisor.
If you would like to make a submission to the Pensions Authority, it is open until 17 November 2025.
Steven Barrett
10 November 2025