Gilmore pledges to address high pension fund charges

IRISH PENSION fund managers are among the worst performers in the world but have some of the highest charges in the world, the Dáil has heard.

As Independent TD Shane Ross called on the Government to stop the pension levy and tax administration fees instead, Tánaiste Eamon Gilmore told him the Government would not put up with pension funds charging consumers too much, especially when the State was giving tax breaks to ensure pension provision.

It would move “to ensure we have a pensions regime in this country that does not make managers rich and pensioners poor”, he said.

Mr Ross said the 0.6 per cent levy, introduced to raise €1.8 billion over four years, meant the Government had “joined the pillaging” by pension fund managers.

Referring to the RTÉ Pension Shockprogramme which highlighted significant administration charges and fees on pension funds, Mr Ross said the Taoiseach "admitted the enormous amounts being taken out of those funds by the industry could well fund the 0.6 per cent levy which the Government has imposed".

Mr Ross quoted Enda Kenny, who had said “the administration charges imposed by pension funds can absorb the vast majority of the temporary pension levy”.

The Dublin South TD asked why the Government was not introducing legislation to remove the levy and take the required amount from the industry, which was in “huge need of reform” and an “accident waiting to happen”. He added that the funds were owned by the banks and producing profits for the banks. “The banks have these people with the same culture as their own,” Mr Ross said.

Mr Gilmore referred to the study to be undertaken by the Department of Social Protection, the Central Bank and Pensions Board to examine the level of charges in pension schemes and the lack of transparency in some of them.

He said that if there were “legislative implications” arising from the study they would be addressed in the House.

Mr Ross said a study was not needed to know what was going on in the industry. “Our pension fund managers are among the worst performers in the world, they have made about the worst investment decisions in the world and they are among the highest chargers in the world,” he said.

He called on the Tánaiste to pledge that the Government would move “to ensure we have a pensions regime in this country that does not make managers rich and pensioners poor”.

Mr Gilmore assured him that the Government would act to implement such a pensions regime. They could not tolerate a situation where “the pensions industry takes too big a share out of the consumer’s pension, especially when the State is providing tax breaks to support pension provision”.