> ## Documentation Index
> Fetch the complete documentation index at: https://docs.pensionsportal.ie/llms.txt
> Use this file to discover all available pages before exploring further.

# Key Function Holders

> What KFHs are, who you need, fit & proper requirements, and how to manage appointments through PensionsPortal.ie.

# Key Function Holders

## What are Key Function Holders?

Under IORP II, all pension schemes must have three **Key Functions** — independent governance roles that provide oversight and assurance over scheme operations. The individuals who carry out these functions are called **Key Function Holders (KFHs)**.

The three required functions are:

<CardGroup cols={3}>
  <Card title="Risk Management" icon="shield-check">
    Oversees the scheme's risk management framework, including the ORA. Responsible for identifying, assessing, and monitoring risks.
  </Card>

  <Card title="Internal Audit" icon="magnifying-glass">
    Provides independent assurance that governance, risk, and control processes are working effectively. Reports directly to the trustees.
  </Card>

  <Card title="Actuarial" icon="calculator">
    Advises on funding adequacy, liabilities, investment strategy, and actuarial assumptions. Must be a qualified actuary.
  </Card>
</CardGroup>

## Why KFHs Matter

KFHs are a cornerstone of the IORP II governance framework. They provide the independent expert oversight that trustees need to make informed decisions about scheme management.

Without properly appointed, fit & proper KFHs, your scheme cannot be compliant with IORP II — and the Pensions Authority will identify this quickly in any review or ACS assessment.

<Warning>
  **You must notify the Pensions Authority within 30 days of appointing or removing a KFH.** Failure to do so is a breach of the Pensions Act.
</Warning>

## Fit & Proper Requirements

The Pensions Authority requires all KFHs to meet **fit & proper** criteria. This means they must demonstrate:

| Criterion               | What this means                                                                 |
| ----------------------- | ------------------------------------------------------------------------------- |
| **Integrity**           | No criminal convictions, regulatory sanctions, or conduct issues                |
| **Competence**          | Relevant qualifications, knowledge, and experience for the function             |
| **Financial soundness** | No undischarged bankruptcies or disqualifications                               |
| **Independence**        | No conflicts of interest that would compromise objectivity (for Internal Audit) |
| **Time commitment**     | Sufficient time available to carry out the function properly                    |

The platform stores fit & proper assessments for each KFH and prompts for annual review.

## Who Can Be a KFH?

* KFHs can be **internal** (employees of the sponsoring employer) or **external** (professional service providers)
* The **Internal Audit** function must be **independent** — the Internal Audit KFH cannot also hold the Risk Management function
* The **Actuarial** KFH must be a qualified actuary (Fellow of the Society of Actuaries in Ireland or equivalent)
* One person can hold the Risk Management and Actuarial functions if they have the appropriate qualifications — but this needs careful consideration

For smaller schemes, it is common to outsource KFH functions to professional service providers.

## Managing KFH Appointments in the Platform

<Steps>
  <Step title="Navigate to Key Function Holders">
    Go to **Governance → Key Function Holders** in the platform.
  </Step>

  <Step title="Add a new KFH appointment">
    Click **Add KFH**. Enter:

    * Full name and role
    * Appointment date
    * Contact details
    * Whether the function is carried out internally or by an external provider
  </Step>

  <Step title="Complete the fit & proper assessment">
    The platform walks you through the fit & proper criteria for the relevant function. Upload supporting documentation (CV, qualifications, reference letters as appropriate).
  </Step>

  <Step title="Trustee approval">
    The appointment must be approved by the trustees. The platform routes this to the trustee board for approval.
  </Step>

  <Step title="PA notification">
    Once approved, the platform generates the PA notification letter. **Submit this within 30 days of the appointment date.** The platform tracks the 30-day deadline and sends reminders.
  </Step>

  <Step title="Set review reminders">
    The platform sets an annual fit & proper review reminder for each KFH.
  </Step>
</Steps>

## Removing a KFH

When a KFH leaves or is removed:

1. Record the removal date and reason in the platform
2. The platform generates the PA removal notification — again, **within 30 days**
3. Immediately begin the appointment process for a replacement — the scheme must not be without a KFH for any function

<Note>
  If a KFH resigns unexpectedly, the PA expects you to act promptly. Document what steps you've taken to find a replacement. A well-documented transition is viewed much more favourably than silence.
</Note>

## KFH Reporting

Each KFH should report to the trustees at least annually. The platform provides a structured reporting template for each function:

* **Risk KFH**: Annual risk report, covering the risk register and any emerging risks
* **Internal Audit KFH**: Audit findings and management responses
* **Actuarial KFH**: Actuarial valuation update and funding position

Reports are stored in the compliance record and can be referenced in the ACS.