Employers urged to comply with pension access

The Government has again urged employers to comply with new legislation requiring them to offer employees access to a pension scheme or Personal Retirement Savings Account (PRSA).

The Minister for Social and Family Affairs, Ms Coughlan, said 170,000 employers had received information from the Government on the new rules and she urged employers to study the material and avail of supports offered by PRSA providers.

From September 15th, employers who do not offer employees with more than six months' service access to a company pension scheme must facilitate access to at least one standard PRSA.

Ms Coughlan said compliance with the legislation, which aims to increase the proportion of workers with their own pension from 50 to 70 per cent, would be monitored closely.

Ms Coughlan said some providers had indicated to her that they had had difficulty getting smaller employers to sign up to PRSAs, but that it was just "the nature of the beast" that many would wait until the deadline before fulfilling their obligations.

Ms Coughlan said a second PRSA information campaign would target employees.

The Government is hoping to avoid a repeat of the UK's experience with its PRSA equivalent, stakeholder pensions, which were written off as a flop within two years of their launch. A report by the Association of British Insurers showed that more than a year after their launch, nine out of 10 employer-designated stakeholder pensions remained "empty boxes" with no members.

Ms Coughlan said that if employees opted not to contribute to PRSAs, the September 15th deadline would simply be a paper exercise for employers.

The Minister was speaking at the opening of the office of the pensions ombudsman, Mr Paul Kenny, who will now investigate complaints arising from the administration of occupational pension schemes and PRSAs.

Members of the public who have gone through the internal disputes resolution procedure under their pensions scheme or PRSAs will be able to complain to the ombudsman and may do so online.

Mr Kenny said trustees and administrators were sometimes reluctant to admit their mistakes.