There is “broad agreement” with the UK to “maintain the status quo” in terms of payments to the holders of UK pensions in the Republic in the event the UK crashes out of the bloc without a deal in March, the Government says.
Almost 135,000 Irish residents were in receipt of British state pensions as of August 2016, up from 133,300 two years earlier, according to data from the UK department of work and pensions. About 70,000 of these were also in receipt of a private British pension.
Many private pensions are covered under so-called passporting rules for financial companies. Without a deal, insurers and pension providers would be legally barred from sending out payments, leaving policies dormant on their accounts.
Appearing before MPs last month, Association of British Insurers director general Huw Evans said it could be “illegal” to pay private pensions to many retired British expats if the UK crashes out of the EU without a deal.“That is a perfectly plausible risk in the future if no agreement is reached in some countries of the EU,” he said.
Asked by The Irish Times whether the Republic was one of those jurisdictions, the insurance industry group said Irish regulators would "need to take action".
“Customers should be reassured that the priority for insurers is the protection of customers’ cover and benefits,” said a spokesman.
"Regulators in Ireland will indeed need to take action in order to guarantee that customers of UK insurers residing in Ireland can continue to receive their pension post-Brexit. There is an easy fix to this issue, but so far the politics of Brexit have prevented this from coming into fruition."
The Department of Social Protection said plans for a no-deal Brexit had been stepped up in recent weeks, and that "the key area of concern" in its contingency plans involved the impact of Brexit on the current reciprocal arrangements for social entitlements.
“Contingency planning for a no-deal or worst-case outcome was identified as an early priority and is now well advanced,” said a spokeswoman. “Its focus is on the immediate economic, regulatory and operational challenges which would result from such an outcome.
"In relation to the areas under the remit of the Department of Employment Affairs and Social Protection, the key area of concern is the impact of Brexit on the current reciprocal arrangements for social insurance and social assistance schemes and child benefit between Ireland and the UK, including Northern Ireland.
“The objective is to ensure that the reciprocal social welfare rights and related entitlements, which currently exist for Irish and UK citizens moving within Ireland and between Ireland and Britain under the Common Travel Area, are safeguarded and maintained, and there is broad agreement to preserve the status quo in this regard.”
The department said Minister for Social Protection Regina Doherty had met with UK secretary of state for work and pensions Esther McVey, during which she emphasised this position as her "objective".
“I am happy that we have a broad agreement to preserve the status quo in that regard,” said Ms Doherty.
Range of scenarios
The Financial Conduct Authority, which regulates personal pensions in the UK, said firms based there and servicing clients in the European Economic Area "should continue to prepare for a range of scenarios".
“They should discuss these arrangements and the implications of a transition period with the relevant EU regulator,” said a spokesman. “We will keep these expectations under review as negotiations proceed.”
The Pensions’ Regulator in the UK does not deal with personal pensions, but, in terms of occupational pensions, it said it would not comment on “whether potential issues could arise in the future”.