The National Pensions Reserve Fund—Section 12 Guidelines

1. Introduction

The National Pensions Reserve Fund Commission (the “Commission”) established under Section 5 of the National Pensions Reserve Fund Act, 2000 (the “NPRF Act”, wishes to adopt Guidelines for the purposes of Section 12 of the NPRF Act and to ensure a high standard of corporate governance by the members of the Commission or any member of staff of the National Treasury Management Agency (the “Manager”) and any mem-ber of a committee which may be established by the Commission pursuant to Section 14 of the NPRF Act (a “Committee”) and to address the risk of actual or potential conflicts of interests and their disclosure.

For the purpose of these Guidelines the “Compliance Officer” means the officer appointed by the Manager to manage the compliance function on behalf of the Commission, any committee thereof and the Manager.

2. Duty to Disclose an Interest:

Section 12(1) of the NPRF Act, 2000 provide that

“Where a commissioner or a member of the staff of the Manager or a member of a committee has a pecuniary interest or other beneficial interest, in and material to, any matter which falls to be considered by the Commission, the Manager or a committee, he or she shall-(a) disclose to the Commission or, as the case may be the Manager

or the committee the nature of his or her interest in advance of any consideration of the matter.

(b) neither influence nor seek to influence a decision to be made in relation to the matter,

(c) take no part in any consideration of the matter, and where relevant—

(d) absent himself or herself from the meeting or that part of the meeting during which the matter is discussed, and

(e) not vote on a decision relating to the matter.”

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Subsection (7) of Section 12 provides that “The Commission shall issue and publish guidelines as to that which constitutes an interest” for the purpose of Section 12.

GUIDELINE 1

Definition of an “interest”

The Commission has determined that each of the interests on the list of reg-istrable interests contained in the Second Schedule to the Ethics in Public Office Act, 1995 shall constitute an “interest” for the purposes of Section 12 of NPRF Act.

A copy of the Ethics in Public Office Act together with the Second Schedule list is attached to this note as a Appendix A.

That list should be construed as though references therein to a “desig-nated directorship” were references to a member of the Commission or any Committee or any member of staff of the Manager.

GUIDELINE 2

Annual Disclosure Statements

The Commission has also determined that, in line with Section 17 of the Ethics in Public Office Act, 1995, there should be an annual disclosure statement (the “Annual Statement”) prepared by each member of the Commission, any member of a Committee and any designated member of staff of the Manager.

A “designated member of staff of the Manager” means a person who has been designated by the Chief Executive of the Manager as a person who is engaged in the function to be performed under the NPRF Act.

Each such person shall in each year during any part of which he or she holds or held office as a member of the Commission, member of any com-mittee or designated member of staff of the Manager prepare and furnish to the Compliance Officer a statement in writing of—

(i) the interests of the person, and

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(ii) the interests of which he or she has actual knowledge¹ of his or her spouse¹ or a child of the person or of his or her spouse¹ which could materially influence the person in or in relation to the formance of the functions of the office by reason of the fact that such per-formance could so affect those interests as to confer on or without from the person or the spouse¹ or child a substantial benefit.¹

The Annual Statement should be in the form of the statement attached to this note as Appendix B.

The first such Annual Statement should be supplied to the Compliance Officer at such time as the Chairperson of the Commission may determine.

All subsequent Annual Statements should be furnished to the Compliance Officer not later than 31 December in each year or at such other time or times as the Chairperson of the Commission may determine.

GUIDELINE 3

Disclosures to be made under Section (12(1) of the National Pensions Reserve Fund Act Guideline on pecuniary interest or beneficial interest.

The Commission has determined that for the purposes of Section 12(1) of the NPRF Act:

(i) a person will be regarded as having a “pecuniary interest” if that per-son stands to gain money or money’s worth or to avoid a loss of money or money’s worth; and

(ii) a “beneficial interest” includes—

(a) a right, privilege, office or dignity and any forbearance to demand money or money’s worth or a valuable thing.

(b) any aid, vote, consent or influence,

(c) any promise or procurement of agreement or endeavour to pro-cure, or the holding out of any expectation of, any gift, loan, fee, reward or other thing aforesaid, or other advantage and the avoidance of a loss, liability, penalty, forfeiture, punishment or other disadvantage; or other advantage and the avoidance of

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a loss, liability, penalty, forfeiture, punishment or other disad-vantage;

This definition of beneficial interest is the same as the definition of a

“benefit” under Section 2 of the Ethics in Public Office Act. Note that a

“gift” means money or other property.

When is an interest is “material”?

The Commission has determined that a person or a connected person² has a material interest in a matter falling to be considered by it and therefore requiring disclosure pursuant to Section 12(1) of the NPRF Act, 2000 if the consequence or effect –

(a) of the performance by the person of a function of his or her office or (b) of any decision made in relation to or in the course or as a result of

the performance of of such a function by the person concerning that matter may be to confer on or withhold from the person or the con-nected person² a significant benefit without also conferring it on or withholding it from persons in general or a class of persons which is of significant size having regard to all the circumstances and of which the person or the connected person is a member.

This section is modelled on the definition of a material interest under Section 2(3) of the Ethics in Public Office Act, 1995.

A “connected person”:

Any question whether a person is connected with another shall be deter-mined in accordance with the following:

(i) person is connected with an individual if that person is a relative³ of the individual,

(ii) a person, in his or her capacity as a trustee of a trust, is connected with an individual who or any of whose children or as respects whom any body corporate which he or she controls is a beneficiary of the trust,

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(iii) a person is connected with any person with whom he or she is in partnership,

(iv) a company is connected with another person if that person has control⁴ of it or if that person and persons connected with that person together have control⁴ of it

(v) any two or more persons acting together to secure or exercise control of a company shall be treated in relation to that company as con-nected with one another and with any person acting on the directions of any of them to secure or exercise control of the company.

Appendix A: Ethics in Public Office Act, 1995, Appendix B: Annual Statement

Appendix C: Sections 157 and 102 Corporation Tax Act, 1995.

Note: The contents of the above appendices are not reproduced here.

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25. (1) The chairperson of the Commission shall appear before, and give evidence to, the Committee of Public Accounts at such times as the Committee may reasonably request.

(2) Any evidence given under subsection (1) shall, subject to preserv-ing confidentiality in relation to such commercially sensitive information, as determined by the Commission, relate to the policies of the Commission in relation to the Fund.

26. (1) The Commission shall keep in such form as may be approved of by the Minister all proper and usual accounts of all monies and other assets appropriate to the Fund. The accounts shall include a separate account of the administration fees and expenses incurred by the Commission in opera-tion of the Fund.

(2) The audited accounts prepared under section 12 of the National Treasury Management Agency Act, 1990 shall note a record of expenses incurred by the Agency as the Manager.

(3) Accounts kept in pursuance of this section, signed by the chief executive officer of the Manager and by a commissioner authorized for that purpose, shall be formally adopted by the Commission and shall be submitted as soon as may be, but not later than four months after the end of the financial year to which they relate, by the Commission to the Comptroller and Auditor General for audit. A copy of the accounts as so audited shall be presented to the Minister as soon as may be and the Minister shall cause a copy of the accounts as so audited to be laid before each House of the Oireachtas.

(4) The chief executive officer of the Manager shall, whenever required by the Committee of Public Accounts, give evidence to that committee on:

a) the regularity and propriety of the transactions recorded or required to be recorded in any book or other record of account subject to audit by the Comptroller and Auditor General which the Commission is required by or under statute to prepare;