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

Dail Drawdown

Minister Noonan went on to say “I considered that I was in a position to make these significant commitments on foot, among other things, of proposals in late 2012 from the pensions sector for changes to the Standard Fund Threshold (SFT) regime, as an alternative to standard rating of pension tax relief, which it was claimed would yield savings and tax revenues in the region of €400 million. Pending further analysis of this claim, I included a much lower figure of €250 million in the Budget 2013 arithmetic. That analysis has since revealed significant downside risks to the achievement of even this lower level of yield or savings. The estimate of the yield from the changes to the SFT regime which I announced in last week’s Budget is €120 million. These changes differ in some respects from those proposed by the pensions sector and reflect, on legal advice, the requirement to protect pension rights at the date of change. In addition, valuation factors to place a value on Defined Benefit pensions for SFT purposes will vary with the age at which the pensions are drawn down thereby improving equity within the regime.

I would not categorise my engagement with the pensions sector on this matter as a “deal”, in the manner suggested by the Deputy. However, the assessment that the changes to the SFT regime required to deliver on the Budget 2013 commitment to cap taxpayer subsidies to higher value pensions would have a considerably lower yield than originally put forward, meant that the achievement of the overall budgetary objectives (including the continuation of the reduced VAT rate for the tourism sector and to make provision for potential State liabilities which may emerge from pre-existing or future pension fund difficulties) necessitated the imposition of the additional 0.15% pension fund levy for 2014 and 2015.”

Dáil Drawdown - Pension Industry Charges Working Group

In this weeks instalment of Dáil Drawdown, Minister Noonan discusses the pensions working group. Let us know your thoughts. 

Minister Noonan went on to say: I understand that the report of this group is currently being finalised and will then be presented for consideration to my colleague, Ms Joan Burton TD, the Minister for Social Protection before being submitted to Government and published. Appropriate decisions will be made on the report’s contents and recommendations, and among other things, on the scope for productive interaction with the pensions industry in relation to offsetting the impact of the pension fund levy through reductions in fees or charges.

Source:www.oireachtas.ie

Dáil Drawdown - Drawdown of Pension Funds

Source: www.oireachtas.ie

Dáil Drawdown

Dáil Drawdown is a new edition to our blog and brings you recent pension news straight from the Dáil Chamber. Here is our first installment.

Source: www.oireachtas.ie