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Irish ombudsman calls for scheme modernisation

IRELAND - The Pensions Ombudsman has been reported as saying that most Irish schemes are designed to meet the needs of employers rather than scheme members.

RTE Business reported Paul Kenny saying that public sector schemes still do not recognise unmarried partners.

He believed short-term residents ought to be able to transfer money to their home country rather than sign up to an Irish scheme for an uncertain period.

Referring to workers from Eastern Europe or the Far East, Kenny said the last thing some of them needed was a small, preserved pension, payable in euro in 30 years' time. He said they should be allowed to bring back the money they had accumulated if they returned home, RTE Business reports.

Elsewhere, employers will be told to give their pension scheme trustees more education on alternative investments at tomorrow's national pension fund conference in Dublin.

The Irish Association of Pension Funds (IAPF) declared last year that alternatives could benefit schemes by helping to maintain overall returns while improving levels of risk diversification.

But Jennifer Richards, a member of the IAPF investment committee, will tomorrow declare a real knowledge gap persists in areas such as private equity, hedge funds, global tactical asset allocation and active currency management.

This followed a survey of 14 major schemes with 20,000 members and €15bn in assets, which revealed reluctance on the part of some trustees to grapple with complex new alternatives.

"These assets are seen as lacking in transparency, expensive and difficult to assess," the survey noted. Eighty-eight percent of respondents had considering invested in hedge funds but refrained.

But Richards told IPE that employers have a responsibility to ensure their scheme trustees have access to proper education and the necessary time to absorb new ideas.

She added that the IAPF survey saw a split between consultancies and trustees on Liability-Driven Investing. "The consultants responded that LDI gave a valuable focus on risk and that even if the ideas were not implemented, schemes were better off for discussing them."

Trustees, on the other hand, were quite sceptical, perceiving LDI in terms of a diminuition of returns and a mere opening for investment banks to sell their wares.

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