IAPF laments lack of industry representatives in pension reform group
The Irish government needs to engage with the local pensions industry properly if none of its representatives is to sit on a group tasked with increasing occupational coverage, the Irish Association of Pension Funds (IAPF) has argued.
Jerry Moriarty, chief executive of the IAPF, questioned the lack of industry representatives or larger pension funds on the Universal Retirement Savings Group (URSG), which will be tasked with devising a roadmap for greater pension coverage by the end of the year.
The move was announced by minister for social protection Joan Burton, who said it would be crucial that the design and structure of a new, universal supplementary pension scheme – previously referred to as Shamrock Saver, Celtic Saver and MySaver – secured the confidence of all affected workers.
Burton, also Ireland’s deputy prime minister, said the URSG would draft a roadmap for government on the introduction of a system, which would be based around greater access to defined contribution (DC) savings and offer details of cost, the system’s key features and its design.
However, despite the final report being due by the end of the year, Burton said any date for the launch of the new system would require careful consideration and be influenced by “a wide range of factors and the presence of a favourable economic environment”.
She has previously said the system’s roll-out would be “very gradual”.
The URSG, comprising 10 members and a chairman from the Department of Social Protection (DSP), will largely consist of representatives of government departments and agencies.
Alongside representatives from four government departments and the office of the Taoiseach, Enda Kenny, the National Treasury Management Agency, Pensions Authority, Central Bank of Ireland and revenue office will join the group.
Additionally, one expert in international pensions reform and one expert from a country that has successfully increased coverage will join the group.
Moriarty welcomed the formation of the URSG but said the IAPF would have preferred if some of Ireland’s pension funds had figured among its members.
“What’s probably more important is not whether people are on it or not but whether they do engage properly with people who do have the experience of running DC schemes,” he said.
For its part, consultancy LCP said there was “compelling evidence” Ireland needed to increase coverage.
“We hope the establishment of this group leads to constructive action in this regard,” he added.
The URSG will now need to consider whether to opt for a DC system with individual accounts or a collective DC model.
Additionally, the question of whether it should offer a government-backed default option for savers – similar to the UK’s National Employment Savings Trust or Sweden’s AP7 – will need to be addressed, as well as the level of savings that could be introduced in an auto-enrolment system.
Separately, DSP also confirmed the seven members of the Pensions Council, set to advise Burton on future pension reform after an overhaul to address concerns of regulatory capture.
The members include two journalists, as well as Roma Burke of LCP Ireland, Kirstie Flynn of Trustee Principles and Sandra Rockett of Irish Life Investment Managers.
The Society of Actuaries in Ireland applauded Burke’s appointment and that of several other of its members – Tony Gilhawley, Sandra Rockett and Shane Whelan – as they would contribute a “wealth of skills, knowledge and experience” to the debate, while LCP said it was “very proud” of Burke’s selection.
“The Society is committed to contributing to debate on matters of public interest where an actuarial perspective can add value, and we look forward to engaging with the Council in that context,” it added.
Until now, DSP had only named the Council’s chairman, Jim Murray, a former director of the European Consumers Organisation.