TAX RELIEF on private pensions should be abolished and the money saved put into a State pension for everyone that would keep all women and men over the age of 65 out of poverty, according to the National Women’s Council of Ireland.
Rachel Doyle of the council told a conference of the Women Lawyers Association at the weekend that in 2006 tax relief on private pensions cost the State €2.9 billion, exactly the same amount of money that was spent on State pensions.
The State should provide a first-tier pension that would enable everyone to have a decent standard of living, and also provide for everyone’s economic independence, she said. She pointed out that at the moment women’s eligibility for the non-contributory old age pension was linked to their husband’s income.
The conference, “Missing – Our Future: Women and the Great Pensions Robbery”, was told by Eileen Finn BL that in Ireland pension schemes had lost 37.5 per cent of their value, while in Germany the figure was only 8.1 per cent. This was due to the way Irish pension schemes were operated.
She recalled that in the novel The Bonfire of the Vanitiesthe image used for financial management was that when a cake was cut crumbs fell off which went to the financial managers, the "masters of the universe".
“Here the cake is being passed around so much and so often that so many crumbs are falling off it there is nothing left,” she said.
“Actuaries get a huge cut. Stock-brokers get a huge cut. The trustees are getting a huge cut. Lawyers are getting a cut, and the State is funding all of this with tax relief. It’s all going to these guys.”
She agreed it might be better to move this money straight to a State-funded proper pension, as advocated by the National Women’s Council of Ireland. But she said it would not happen overnight, especially because of all the vested interests involved.
“Women need a plan. Don’t depend on the ‘masters of the universe’ and their financial products. Think outside the pension box. Invest in something real. Acquire a new skill. If you invested all your money in a pension scheme it would be gone.”
She said more regulation was not the answer. “There’s no point in more regulations if we are not implementing the ones we have.”
David Doyle of the Irish Pension Board agreed that over the past 10 years or so Irish pension schemes had been overexposed to equities, especially financial equities.
“They were caught up in a rapid growth frenzy and everyone was a party to it.”
The pensions board was proactive in working with schemes in relation to them meeting the funding standards, giving them extra time to formulate late funding proposals and also asking them to look at the benefits they were offering members and how they were going to fund them in a realistic way.
Despite the problems, he urged people to start pensions early. “Pensions are a 40-year commitment.”
The pensions ombudsman Paul Kenny said where disputes arose over pensions many of them were due to poor communication and not taking the concerns of the person seriously. Many complaints could be dealt with through internal disputes resolution, but when a complaint came to him he would investigate it and had the power to give a final determination, which could only be appealed to the High Court.