Dail Drawdown

To recap, the following specific recommendations are set out in the report:

1. Continue to monitor the implementation of the 2012 Consumer Code (Central Bank) and take specific actions to:

a. Examine the practice of re-brokering to ensure that it is always in the best interests of the consumer; and

b. Conduct an exercise to ensure compliance with the recently introduced requirement for Annual Statements.

2. Develop approaches to improve consumer, employer and trustee awareness and knowledge of pension charges.  This should ensure that information is clear and concise.  It should be standardised, where possible, and based on best practice (several organisations have a remit here).

3. Develop a communications action plan on pension charges (several organisations have a remit here).

4. Improve trustees’ knowledge and awareness of pension charges (Pensions Board).  Take specific actions to:

a. Develop a separate module on pension charges in trustee training;

b. Provide a support service to trustees setting out principles and best practice.

5. Review occupational pension disclosure regulations specifically to:

a. Provide for the issue of an Annual Statement to all deferred members (Department of Social Protection, Pensions Board);

b. Improve the information provided in the Statement of Reasonable Projection and the need for focussed detail should be reviewed (Department of Social Protection, Pensions Board).

6. Monitor developments and continue efforts to develop a single standard measure that would assess all costs and charges and thereby enable easier comparisons to be made (Department of Social Protection, Central Bank, Pensions Board).

7. Conduct further research on the drivers behind consumer choice of individual pension products – with particular reference to PRSAs.

8. Ensure data on charges is collected on a periodic basis - 3 yearly intervals is considered appropriate - to allow for continued scrutiny and future decision-making. (Central Bank, Pensions Board).

9. Evaluate the impact of this report, these recommendations and future EU developments after two years and assess if further and more stringent recommendations are required (Department of Social Protection, Central Bank, Pensions Board).

Source: www.welfare.ie

Aidan McLoughlin discusses the government pension levy on RTE Prime Time

Aidan McLoughlin appeared on RTE's Prime Time on Tuesday 28th January to discuss the government pension levy. Click the following link to view the segment:

Prime Time Discussion on Government Pension Levies, 28th January 2014

Trustee Training Deadline is approaching

The deadline for trustee training is February 1^st 2014.  Trustee training ensures that occupational pension schemes are run to the highest level of governance and compliance.  ITL are an established provider of independent professional trustee services to occupational pension schemes.

ITL are approved trustee trainers with the Pensions Board and have developed an online trustee training course to ensure all trustees can complete their obligations.  To begin the process, click here to complete a short survey.

More information can be found at www.trustee.ie.  Alternatively you can contact Elma Fox on Elma.Fox@Trustee.ie.

Independent Trustee Company is a proud sponsor of the IBA Life, Pensions and Investment Awards for Brokers, 2014

2014 will mark the introduction of the inaugural IBA Life, Pensions and Investment Awards for Brokers. This black tie function is to be held on Thursday, March 13^th in The Round Room, Mansion House and ITC are delighted to announce our support for what promises to be an exciting event for all brokers in the life, pension and investment market.

The LPI Awards will ensure that those at the forefront of the profession are identified and commended. The event aims to give recognition to the life, pension and investment brokers who have proved their excellence, professionalism and dedication to maintaining high standards in the Irish market.  There are ten different award categories to be won, to recognise and reward brokerages for their significant accomplishments. 

Consisting of a drinks reception, dinner, awards ceremony hosted by a celebrity compere and after show entertainment, the LPI Awards for brokers will be a night to remember and an event that ITC are proud to support.  Full details of the event are available on the website: www.lpiawards.ie

Why aren't pensions totes amazeballs?

To paraphrase Oscar Wilde: “Pensions are wasted on the Young”. 

The Question is Why?

A mini-survey was carried out on 67 individuals in different industry sectors under the age of 35 with some of the findings coming as a surprise. The purpose of this survey was to derive an idea of the opinions of those individuals on saving for their future.

The findings indicated the youth of today are focused on ‘living for the now’. However, when asked about their idea of what retirement means, they think of a time which is fun, filled with holidays and, specifically, not having to work. The State pension nowadays is less than half the current average salary of those in employment in this age group, which poses the question ‘how do they expect to fund for this expected lifestyle?’

The results of the survey reveal that the majority of these individuals do not have a pension scheme. Just fewer than half the participants claim that their employer company does not provide a pension scheme. It was surprising to note that a large amount of these individuals stated they have not been approached by their employer and advised of the availability of a mechanism to begin saving for their retirement.  It is a mandatory requirement that all employers offer a company scheme or a standard PRSA, this leads us to believe the availability of such schemes are not sufficiently promoted.

When the sample was asked if they would save themselves for retirement, responses were negative, consisting of phrases such as “too costly”, “can’t afford to” and “maybe in the future”.

The lack of saving earlier in life will mean a significant amount of stress will be placed on the amount to be contributed to make up the same expected salary for retirement. Take for example, two people, both earning €40,000 per annum and expecting to get a pension of 68% of that salary (€24,600). One decides to begin saving at 26, the other at 41. To achieve the same outcome they will both have very different contribution amounts:

It is important to focus on providing guidance to younger people to invest in their pension as this will benefit them later in life when they may need more disposable income.

This issue was discussed directly with some of the participants who worked in financial services and who were therefore professionally aware of the need for pension savings but had not yet undertaken any pension planning themselves.

Whilst validating some of the comments outlined above these participants also offered some comments on the approach of the industry itself to the issue:

“If pensions are so important why do they appear at the end of the Manual?”

“When we were presented with details of the financial planning pyramid – pensions always appeared at the bottom”.

Portions of the survey undertaken focused on particular features that could be included in pension products to make them of more interest to young people. This will form the subject of a later article.

However both the general comments and the specific feedback from those in the industry highlighted a number of points about communication:

1. We as an industry are not clear in the message we give to young people on this topic
2. Whilst employers are obliged to provide access to a pension mechanism, greater work needs to be done around communicating this to the younger audience

The under 35s are often referred to as the “Apple Generation”. This reflects the significance of technology and social media to their everyday lives. Perhaps the real message coming from this survey is that greater use of such tools is necessary if we want to communicate fully to this generation.

By Emma Herrity, Trustee Administrator, Independent Trustee Limited.