Report on Pensions Charges published - Burton
Social Protection Minister Joan Burton today announced the publication of the Report on Pensions Charges 2012.
The report highlights a wide range of issues in relation to pension charges and identifies a number of serious problems. While the provision of pension schemes cannot be cost free, it is clear that there are major challenges to be addressed in the two main areas of reasonableness and transparency of charges.
Minister Burton explained:
This is the first comprehensive Government report on this subject. It is clear from the research that many schemes and individuals are paying more than they need to. The research particularly points to small occupational schemes and individual pension policies incurring high costs.
Key findings include:
- There is a wide variation in charges.
- Individual pension charges are expensive.
- An individual with a final pension fund of €400,000 could lose up to 30% or €120,000 in charges
- Occupational pension charges can be reasonable, but many schemes are paying more.
- A person in a defined contribution scheme with a final pension fund of 400,000 could lose up to 15% or €60,000 in charges
- Strong economies of scale exist – smaller occupational schemes pay more.
- There is considerable evidence of re-brokering (scheme review and amendment) in recent years which needs further examination.
Minister Burton invited comments on the report saying:
As this report is a fact finding study, which is technical and complex in nature, I would also like to give interested individuals and bodies an opportunity to consider the report and its recommendations and respond over the next 3 months (end of January 2013). I will then propose to Government any further policy or regulatory action necessary.
The Report on Pension Charges in Ireland 2012 is published on the Department’s website at www.welfare.ie
.Read the full press release here.