William Fry Spring Breakfast Briefing Series 29 April 2009 David Malone Head of Information The Pensions Board PENSIONS - OVERCOMING THE CHALLENGES IN TODAY’S ECONOMIC CLIMATE
Jan 04, 2016
William Fry Spring Breakfast Briefing Series29 April 2009
David MaloneHead of InformationThe Pensions Board
PENSIONS - OVERCOMING THE CHALLENGES IN TODAY’S ECONOMIC
CLIMATE
The Pensions Board focus
Three key operational areas:
– Supervision, regulation and enforcement
– Policy, legal and actuarial
– Information and awareness
Numbers in Irish pensions• Company pension scheme
579,922 members in 1,271 DB schemes
272,197 members in 90,424 DC schemes
• Personal Retirement Savings Accounts (PRSAs)155,632 PRSA contracts in force (88,213 employers had signed up with a PRSA provider )
• Personal pension plans and Retirement Annuity Contracts (RACs) 200,000 plus contracts (Irish Insurance Federation)
• Fund assets approximately €60 - €80 billion • Voluntary regime for supplementary pension provision
(Figures at end December 2008)
Changing World We Live In
– We are living longer– More contract work– More mobility in careers– Changing work patterns– More part-time working– Single parent households
• Smaller families
• Separation/divorce
Changing Demographics
2006 2026 2056
No’s at work 2,000,100 2,268,000 2,125,000
Aged over 65 464,000 844,000 1,532,000
No’s at work per person over 65
4.3 2.7 1.4
Why Have a Pension?Where will your income come from when you retire?
The current State social welfare pension is €230.30 per week
(or € 11,975.60 per year)
…….will this be enough to meet all your needs in retirement?
Almost 80% of the Pensions Board consumer research sample said that the State old age pension would NOT meet their needs in retirement
Pension Adequacy
• Pension expectations
• Investment losses
• Investment risk
• Risk management
DC Schemes
Scheme members should be provided with:
– adequate and understandable explanations of investment choices and risks
– schemes should provide lower risk investment choices to members as they approach retirement
– schemes should have well-designed default investment options for all members
– scheme members themselves should also take an active role in their pensions
DC Schemes Issues
– Compulsory annuity purchase– Annuity purchase deferral– Statement of Reasonable Projection – Long term DC strategy (relax compulsory
annuity purchase requirements?)– Pensions Board guidance
DB Scheme FundingCurrent difficulties
– over-reliance on outperformance of equities over other investments
Actions taken
– relief measures - extension to recovery periods– Government Pensions Framework– Pensions Board guidance
Pensions Information
www.pensionsboard.ie
Information ServicesWebsite
Guidance & FAQsE-mail alerts
Enquiry serviceTrustee supports
Regulation and Compliance
• Risk based assessment
• Misappropriation of scheme assets
• Registered Administrators (RAs)
• Board prosecutions and on-the-spot fines
Thank You