Employer uptake of PRSAs is poor

Less than one-third of employers signed up to a Personal Retirement Savings Account (PRSA) provider by the end of September, it emerged yesterday. Laura Slattery reports.

The Pensions Board announced that 51,782 employers had granted employees, who are excluded from an occupational pension scheme, access to a standard PRSA pension by this date.

This figure falls far short of the 170,000 registered employers to whom the Pensions Board sent guidelines on pensions obligations in advance of the September 15th deadline.

Some of these would have already allowed all employees into an occupational pension scheme. Others would have introduced a new scheme or extended an existing scheme to all employees to avoid PRSAs.

Ms Anne Maher, chief executive of the Pensions Board, said there was evidence that the number of occupational schemes in operation had increased due to the PRSA deadline and European legislation that requires fixed-term contract workers to receive equal treatment to full-time staff with regard to pensions.

However, it is likely that tens of thousands of employers have ignored the new rules, which require that employers offer all employees access to a pension scheme or PRSA.

The Pensions Board is following up on 25 whistleblow reports and has conducted 52 audits on employers.

The board operates a LoCall phone line at 1890 656565 for employees to report employers who are not compliant and is to begin a monitoring programme in conjunction with other Government agencies in 2004.

By the end of September, Just 6,707 individuals had started saving for their retirement through PRSAs. Of these, 2,454 were employees from 845 different companies contributing to employer-designated PRSAs.

The total value of assets in PRSAs at the end of September stood at €5.2 million.

The Pensions Board is putting a positive spin on the figures, saying that PRSA providers had initially concentrated on signing up employers rather than pursuing the actual sale of PRSAs.