Pensions industry criticised for high charges

CONFERENCE ROUND-UP:PRIVATE PENSION funds have generated lower returns on average than the National Pensions Reserve Fund, the Kenmare conference heard yesterday.

Donal de Buitléir of the Irish Fiscal Policy Research Centre and Don Thornhill of the National Competitiveness Council criticised the pensions industry for its charges, which they said were high and lacking transparency.

During a session devoted to pension issues, they said too few working people had pensions, with just over half of workers providing for their retirement.

Alan Barrett of Trinity College Dublin said the move last year to raise the age at which people could draw State pensions from 65 to 68 was more radical than most other countries, both in the relatively late retirement age and the timeframe for its introduction.

He presented survey figures suggesting that the announcement of the pension changes did not have a significant impact on people’s expectations of when they will retire. One-third of public-sector workers believe they will retire before the age 65, while only 15 per cent of those employed in the private sector do so.

Most of Saturday’s sessions were devoted to competition issues. David McFadden and John Evans of the Competition Authority said advances made in competition in Ireland had occurred at times in a “haphazard and inconsistent fashion”.

They added that competition policy was at a critical juncture and that “the State has been hard pressed to resist demands to exempt various sectors of the economy from competition law”.

Paul Gorecki of the Economic and Social Research Institute said Government focus on competition enforcement weakened sharply from 2008. Consultant Pat Massey pointed to the latest Global Competitiveness Report, which found Ireland ranked 25th in the effectiveness of its competition policy.

Vincent Power, a corporate lawyer, suggested that a renewed commitment to using existing competition tools could act as a “non-financial stimulus” for the economy.

The conference concluded at lunchtime yesterday with a study on the site valuation tax to be introduced in December’s budget.

Micheál Collins of TCD said it was unfair owing to its flat nature, although he acknowledged that it was an interim measure while a more equitable property tax is devised and implemented over the longer term.