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Matheson Pensions Update: New and Increased Obligations of Pension Scheme Trustees under the GDPR

Services: Employment, Pensions and Benefits DATE: 13/12/2017

The General Data Protection Regulation (or “GDPR”) has significant implications for those who handle personal data, including employers, trustees and pension scheme service providers.  In this briefing, Jane McKeever, a senior associate in our Pensions Group, focuses on the new and increased obligations of pension scheme trustees under the GDPR.

The GDPR will replace existing data protection legislation and will come into effect in each member state of the EU on 25 May 2018.  Given the relatively short timeframe before the GDPR comes into effect, as well as the level of work involved to achieve compliance, trustees should be taking action now to address their responsibilities.

A recap on the current position

Data protection legislation exists to protect the privacy rights of individuals in relation to their personal data.  In Ireland, data protection legislation is currently contained in the Data Protection Acts 1988 and 2003 (the “DPA”).

The way in which pension schemes are operated requires trustees to collect and store high volumes of personal data (including sensitive personal data) making them data controllers for the purposes of the DPA.  Although the processing of members’ personal data is often carried out by third parties, such as professional administrators, advisors and consultants, scheme trustees remain responsible for compliance with the DPA.

As data controllers, trustees are required to comply with the fundamental principles of data protection, which can be summarised as follows:

  • Obtain and process personal data fairly
  • Keep it only for one or more specified, explicit and lawful purpose(s)
  • Use and disclose it only in ways compatible with these purposes
  • Keep it safe and secure
  • Keep it accurate, complete and up-to-date
  • Ensure that it is adequate, relevant and not excessive
  • Retain it for no longer than is necessary
  • Make a copy of an individual’s personal data available to them, on request

The Data Protection Commissioner (the “DPC”) is the body in Ireland responsible for ensuring compliance with the DPA.  The DPC has a range of enforcement powers available to it and may also investigate complaints made by the general public and carry out investigations.  A data controller found guilty of an offence under the DPA can be fined up to €100,000 on conviction on indictment and / or may be ordered to delete part or all of their database.

The GDPR - What's changing?

The GDPR introduces the concept of data privacy “by design and by default''.  The design element of the GDPR will require trustees, as data controllers, to consider data protection when systems relating to a pension scheme are being designed.  Trustees will also be expected to implement systems which, by default, ensure that data can only be processed in accordance with the GDPR data principles.

Allied to the “by design and by default" theme, is an emphasis on transparency and accountability as fundamental GDPR concepts.  The GDPR imposes new requirements relating to the analysis and documenting of data processing activities.  This forms part of the increased effort being made to ensure that both data controllers and processors are accountable for, and can demonstrate compliance with, their obligations under the GDPR.

For pension schemes (and other organisations), the GDPR introduces significant changes and enhancements to current data protection rights for data subjects, as well as additional requirements for trustees, administrators and other scheme service providers.  We have outlined what we see as the headline issues that trustees need to be aware of below.

  • Strengthening of individuals’ rights with respect to personal data

The GDPR provides for some new rights for individuals including the right “to be forgotten” (ie, to have their data deleted) in certain circumstances.  Individuals will also gain the right to data portability, which is a right to be given a copy of the personal data relating to them in a commonly used format and to have that information transmitted to another party.

The GDPR also makes it easier for individuals to make a claim against a data controller where their right to data privacy is infringed and provides for a right for data subjects who suffer non-financial loss as a result of an infringement to sue for compensation.  These new rights represent significant changes to the current position under Irish law.

  • Enhanced information requirements

Currently, when personal data is being collected, the DPA requires data controllers to provide certain information to the data subjects, including the identity of the data controller, the reason the data is being collected, the use(s) it will be put to and to whom it will be disclosed.

Additional obligations arise under the GDPR in relation to the information to be provided to the data subject (usually the member but may be other scheme beneficiaries),  including obligations to provide:

  • details of the legal basis under which data is being processed;
  • details in relation to how long data will be retained; and
  • information in relation to the individual’s right of complaint where they are unhappy with the implementation of these requirements.

We envisage that this communication of information to members of a pension scheme will be by way of a data privacy notice.  Trustees should aim to make the wording of privacy notices sufficiently wide to cover all processing activities that may be carried out on members’ personal data.  Communications with members in relation to data protection should be made in a transparent manner and must be in concise, clear and plain language.

  • Changes to consent requirements

Under the GDPR, data processing may only occur after an appropriate legal basis for such processing has been identified.

Traditionally, pension scheme trustees have relied on obtaining member consent to comply with this requirement.  The GDPR clarifies and extends the conditions to be met where consent is relied on as a condition for processing.  For example, in order to be valid, consent must be an unambiguous indication of the individual’s wishes (passive consent will not be acceptable).  As well as this, consent may be withdrawn at any time.

The new requirements with respect to obtaining valid consent will not be practical for trustees to comply with and our view is that it would make sense for the trustees of pension schemes to find a different legal basis for routine processing.  This might be compliance with a statutory obligation or legitimate interests (ie, the processing of personal data is required for the proper operation and administration of the pension scheme).   Notwithstanding these alternative legal bases for processing, trustees should note that explicit consent may still be required where special categories of data (including data relating to health, sexual orientation and racial or ethnic origin) are being processed.

  • New data breach obligations

With certain limited exceptions, under the GDPR, trustees will be required to notify data breaches to the DPC without undue delay and, where possible, within 72 hours of awareness.  Failure to notify carries a separate sanction to the breach itself.  If a breach creates a high risk for individuals, then the trustees will be required to notify the relevant individuals without undue delay.

  • Possible requirement to appoint a Data Protection Officer (“DPO”)

Where a data controller’s or a data processor’s core activities consist of large scale processing of special categories of personal data, they are required to appoint a DPO.  While our view is that it is unlikely that pension schemes will be required to appoint a DPO, we are hopeful that this may be confirmed in guidance (either at European level or from the DPC) in due course.   Where a DPO is not required, trustees should give consideration to whether a DPO would be desirable or whether it would be sufficient to nominate an individual (or external data protection advisor) to take responsibility for compliance with the GDPR.

  • Data Protection Impact Assessments

The GDPR provides for Data Protection Impact Assessments ("PIA").  A PIA can be described as the process of systematically considering the potential impact that a project or initiative might have on the privacy of individuals, with the aim of identifying potential issues before they arise and addressing them.  Such assessments will be mandatory where the processing activities to be carried out result in high risks to the privacy rights of data subjects.

  • Increased focus on the responsibility of data controllers in choosing data processors

Trustees, as data controllers, will be required to enter into arrangements only with data processors which can provide sufficient guarantees to implement appropriate measures and procedures in such a way that the GDPR requirements are met and the rights of data subjects are protected.  Trustees will also have a role in ensuring ongoing compliance by those data processors.

Linked to this are additional requirements in relation to processing contracts, which will necessitate a review of all processing arrangements (including in particular administration agreements and service level agreements) currently in place, to ensure that all newly mandated provisions are incorporated.  For most pension schemes, it is likely that a significant amount of work will be required to ensure existing services contracts (eg, administration agreements, service level agreements) are GDPR compliant.

  • Increased requirements for data processors

Trustees, as data controllers, remain responsible for data protection compliance even where processing is outsourced.  Under the GDPR, however, data processors have additional direct statutory obligations (including the obligation to maintain records of processing activities) and will also be directly liable to data subjects where they do not comply with their obligations.

Trustees should be aware that mechanisms are provided for within the GDPR for apportionment of liability between data controllers and data processors with respect to claims by data subjects arising out of an infringement of the GDPR.  Careful consideration will be required as to how liability apportionment should be dealt with in any contracts between trustees and service providers.

  • Tougher sanctions for non-compliance

The maximum fine for a breach of certain provisions will be increased to 4% of worldwide turnover or €20 million, whichever is higher (the seriousness of the infringement affects the level of fine levied).  It is not yet clear whether the turnover of the employer (or the employer’s group) will be of relevance when a fine is being levied against the trustees of a pension scheme.

Key action points for trustees

The period between now and 25 May 2018 is a de facto transition period during which trustees will need to take a number of actions.  The actions required will include the following:


  • Liaise with the scheme’s sponsoring employer to establish whether resources can be shared and where project planning approaches overlap.
  • Assess current approach to data protection.  This will include:
    • mapping data currently held by or on behalf of the scheme as well as data flows;
    • considering whether data held is required and, where possible, reducing the amount of data gathered and held;
    • considering record keeping processes and current data protection policies and procedures; and
    • considering the legal basis currently used for processing data.
  • Undertake a gap analysis between the current approach and the requirements under the GDPR.
  • Review all processing arrangements (including, in particular, administration agreements and service level agreements) currently in place, to ensure that all newly mandated provisions are incorporated.
  • Consider how best to provide individuals with the mandatory information required from a transparency perspective.

Before May 2018

  • Prepare or update privacy notices for members.
  • Consider how data access requests and requirements to report data breaches will be managed (and put in place procedures for same).
  • Create policy and control frameworks with a view to demonstrating compliance with the GDPR, if and when required.
  • Ensure adequacy of data security systems, with specialist IT support as required.
  • Implement any other changes and improvements which are required to achieve demonstrable compliance with the GDPR requirements.


Working towards compliance with the GDPR will take a significant amount of forward planning on the part of pension scheme trustees.  We would advise trustees to take action now to consider what steps they need to take in advance of the GDPR becoming effective.  While trustees should consult with employers in relation to GDPR planning, they should keep in mind that they are data controllers and have separate responsibilities and liability from the employer.

The Matheson Pensions Group is working closely with the Matheson Technology and Innovation Group in relation to the GDPR and would be happy to discuss GDPR readiness with you.  To assist trustees in preparation for the GDPR coming into force, Matheson can:

  • provide training to inform trustee bodies and other personnel on their obligations under the GDPR;
  • assist you in assessing your current approach (ie, help you carry out an initial gap analysis and data assessment);
  • review and / or prepare key documents – including privacy notices, data protection policy, data breach policy, service contracts, record of processing forms and letters to members; and
  • prepare trustees for managing potential data breaches.

Key terms explained

Data is information in a form which can be processed.

Data controller means the natural or legal person, public authority, agency or other body which, alone or jointly with others, determines the purposes and means of the processing of personal data.

Data mapping in the context of a pension scheme is the process of identifying and tracking the data flows within, to and from the scheme.  This assists the scheme trustees to meet their legal requirements with respect to data protection and should also enable the trustees to administer the scheme more efficiently.

Data processor means a natural or legal person, public authority, agency or other body which processes personal data on behalf of the controller (eg, an administrator of a pension scheme).

Data subject is the person who is the subject of personal data (eg, a member of a pension scheme).

Personal data means any information relating to a person (the “data subject”), who can be identified, directly or indirectly, by reference to an identifier such as a name, an identification number, location data, an online identifier or to one or more factors specific to the physical, physiological, genetic, mental, economic, cultural or social identity of that natural person.

Privacy notice is a notice containing the information required to be given to data subjects about the processing of their data.

Processing is a very broad term and means performing any operation or set of operations on data including obtaining, collecting, organising, storing, altering, using, disclosing, erasing or destroying the data.

Special categories of personal data means personal data revealing racial or ethnic origin, political opinions, religious or philosophical beliefs, trade union membership, data concerning health or data concerning a natural person’s sex life or sexual orientation, genetic data or biometric data.