Warning most pension plans will be under expectation

SEVENTY-FIVE per cent of occupational pension schemes would not deliver what recipients expected of them, Fine Gael social welfare spokeswoman Olwyn Enright told the Dáil yesterday.

She called for Government action following the revelation by the chief executive of the Pensions Board that schemes were still operating in substantially the same way as before and carried the same risk.

Ms Enright asked Minister for Social Protection Éamon Ó Cuív what he would do to ensure that the pensions industry was more responsible and made people aware of the risk they were taking.

Mr Ó Cuív said the role of the board was to ensure that best practice was being followed.

He said that if there was a need for further steps to be taken, he would certainly look at them. He believed the management of the board considered it had enough powers currently.

Ms Enright said what worried her was that the board had said there was a problem but not what it would do to solve it.

Mr Ó Cuív said the board had general oversight over the pension funds, and through regulation it could ensure that the proper mix of investments were made.

Labour spokeswoman Róisín Shortall said people were witnessing the worst pension crisis in decades. She challenged Mr Ó Cuív to say what he would do to lower the risk profile of Irish pension funds.

A key criticism of the board was that the investments over recent years were high risk. “That is why so much money was lost from pension funds.”

Mr Ó Cuív said he would like to see the risk profile lowered and would be talking to the board’s new chairperson.

“The first pension for most people is the contributory old age pension, and the objective is to maintain that at 35 per cent of the average industrial wage.That is the first priority because we must ensure that the most universal pension is protected.”

Pressed further by Ms Shortall, the Minister said the issue of board staffing levels was being discussed with the Department of Finance.

Earlier Mr Ó Cuív said the national pensions framework included a range of measures to strengthen the regulatory system. A technical implementation group had been established in May to develop the legislative, regulatory and administrative infrastructure required to put the reforms into operation.