Irish DC members “need to raise contributions”
IRELAND – Members of Irish DC schemes need to raise contributions, says Raymond McKenna of the Irish Association of Pension Funds.
“The average defined contribution pensions member needs to significantly increase contributions if they are to secure an adequate income in retirement,” said McKenna, is a member of the IAPF’s benefits committee.
Speaking at an IAPF conference this week, he said that IAPF figures show that the average contribution by employees and employers to a defined contribution scheme is about 10% of income.
“IAPF research finds that this should be more like 15–25% of income depending on age and individual circumstances,” McKenna said at the “Pensions Adequacy and Governance” meeting in Dublin. McKenna is also a director of KPMG and heads its human capital practice in Dublin.
He said DC members needed to be more aware that retirement income was under threat from market performance and interest rates.
“Even if they get the contribution levels right they have got to be aware of the risk caused by inappropriate investment strategy, volatile equity markets and a low interest rate environment.”
There are currently around 237,000 Irish people with DC schemes.
Meanwhile, the Irish pensions regulator the Pensions Board has advertised a vacancy for Assistant Head of Technical Services and Research on its web site.
And the Pensions Board has also announced that it has seen a 233% increase in weekly telephone enquiries about general pensions issues and the new personal retirement savings accounts (PRSAs).