IORP II and Your Company Pension

06/08/2025


What Directors Need to Know Before April 2026. 


If you're a company director with your own pension plan, maybe an Executive Pension Plan (EPP) or a self-administered scheme, you're likely to be affected by changes coming under IORP II legislation.

From April 2026, all one-member pension arrangements must follow stricter governance rules. This has real implications for how your pension is managed, invested, and maintained going forward.

Let me walk you through what's changing, what options you now have, and how to decide the best course of action for your situation.

So, what is IORP II — and why does it matter to you?

IORP II is an EU directive designed to tighten up the rules around occupational pension schemes. It was originally aimed at multi-member schemes but is now being applied to single-member pensions — the kind many directors and business owners have used for years.

The key takeaway?

Being the sole member of your own pension scheme doesn't exempt you anymore. You now fall under the same obligations as large group schemes — unless you take action.

Here's what's changing.

There are three main areas where IORP II impacts single-director pension schemes:

1. Governance and trustee obligations

If you're the trustee of your own pension plan, you'll now be expected to meet much higher standards. That includes:

  • Preparing annual audited accounts
  • Appointing internal roles like compliance, risk management, and audit
  • Meeting "fit and proper" requirements (this includes training or qualifications)

In short, being your own trustee just got a lot more complicated.

2. Investment rules are tightening

Under IORP II:

  • New schemes can't invest directly in property or borrow money against pension assets.
  • Existing property investments made before April 2021 can stay in place — but you can't expand or add to them.
  • If you liked the control and flexibility of direct property through your pension, this could be a substantial change.

3. Reporting and compliance

There's now a heavier admin load:

  • Annual member statements
  • ESG (environmental, social, governance) considerations
  • Data reporting to the Pensions Authority

This is on top of managing your investments and ensuring the pension is compliant.

What are your options? Master Trust vs EPP

With these changes, many directors are being advised to move their pension into a

Master Trust. Here's the main difference:

Master Trusts are large, professionally managed pension schemes. You join as a member, and all the governance, compliance and reporting is handled for you. By contrast, with your current EPP or SSAP, you (or someone you appoint) must take on all the governance duties — or upgrade the scheme to meet IORP II standards, which could be costly and time-consuming.

Here's how the two compare in simple terms:

  • Master Trust Executive Pension Plan (EPP)
  • Governance Fully managed You're responsible
  • Compliance Already IORP II compliant Must be upgraded Investments Regulated funds only Legacy property can stay (ifpre-2021)
  • Costs Shared across many members (typically lower) Higher admin and trustee costs
  • Control Less hands-on More control, but more admin

What's the downside of moving to a Master Trust?

You give up some flexibility — particularly around direct property investment or bespoke fund choices. If you like full control over how your pension is invested, this could feel like a trade-off.

However, for many directors, the reduced admin burden and guaranteed compliance make it the right move — especially as enforcement of IORP II ramps up.

So, what should you do now?

If you're not sure whether your current pension setup is sustainable under IORP II, here are four practical steps to take:

1. Review your current plan. Is it holding property? Has it borrowed? When was it set up?

2. Assess your governance setup. Who's acting as trustee? Are accounts up to date? Are you IORP II compliant?

3. Compare Master Trust options. Get a sense of the fees, investment choice, and death-in-service benefits.

4. Make a decision before the deadline. Waiting could limit your options or force a rushed move later on.


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