The Minister for Social Protection has also signed legislation preventing occupational pension schemes from investing more than 5% of the scheme’s portfolio in their sponsoring employer. Where the sponsoring employer belongs to a group, the legislation provides that investment in the employer group, including the sponsoring employer, may not exceed 10% of the scheme’s resources.  Small member-controlled schemes are subject to a limit on self-investment to the level of 20% subject to certain constraints. These requirements do not apply to one-member arrangements.

This legislation is of particular importance to large employers who have an occupational pension scheme in operation and trustees should therefore be conscious of the level of any investments that they make in their sponsoring employer through their occupational pension scheme.