PRSAs to shake up pensions sector

The likely introduction of Personal Retirement Savings Accounts (PRSA) at the end of the year will dramatically change the Irish pensions landscape, says an independent insurance brokerage report instigated in Dublin yesterday.

PRSAs are a "radical idea which will enable people in an increasingly flexible age to overcome the inflexibilities of traditional pension plans," according to Coyle Hamilton's "Commentary '99" report.

The flexibility comes mainly in increased transferability between company and individual pensions schemes which greatly benefits the self-employed and those switching employers. Employees using company schemes may augment their benefits while employers may contribute directly to PRSAs. Another key PRSA feature is the flexible retirement age ranging from 55-70.

PRSAs are one of many factors shaping the Irish pensions and benefits market says the report. Employee benefits have also changed significantly in the past year through the influence of American multinationals. New trends include flexible employee benefits and approved profit sharing plans. "With flexible benefits an employee has a choice of type and plan. There's a menu to select benefits to suit an employee's circumstances and changing circumstances," according to Mr Kieran Kelly, managing director, employee benefits and investments.

In relation to company management, corporate liability issues are of major importance in relation to worker safety legislation, the report says. Companies taking cost savings shortcuts at the expense of worker safety may face litigation taken by employees. There's been "a worrying increase in successful employer's liability claims brought by employees" noted Mr Hugh Governey, managing director, corporate broking.