IRELAND – The Irish pensions regulator says it is concerned that the shift to defined contribution pension schemes may result in inadequate benefits and that targets for private pension provision may not be met.
“A serious concern to the Board in the policy area is the implications of the move from defined benefit to defined contribution coverage and the consequential dangers of inadequate benefits arising,” the Pensions Board says.
It adds that there is a “real possibility” that the targets for increased private pension coverage may not be met.
“The Board is conscious that targets for increased private pension coverage are a major challenge and that failure to achieve these targets is a real possibility,” the Board says in a strategy document.
“In this context it feels that it is too early to examine the option recommended by the NPPI [National Pensions Policy_Initiative] of further mandatory options and the Board does not think that it should adopt a position on this at this point.”
It said it did not see a need for another major overhaul of pension provision “at this stage”, though it was conscious of the need to develop and evolve the current agreed direction.
It also recognised the introduction of the new FRS17 accounting standard, which takes a snapshot of a pension fund’s liabilities, as one of a series of “major external influences” on the pensions market.
Another live issue for the Board is concern about the complexity of pension regulation and calls for it to be simplified.
In December the European Commission’s report on sustainable pensions in Europe praised Ireland’s “clear commitment” to improving adequacy, saying it had made good progress to ensuring financial sustainability.
The Board regulates the Irish occupational pensions market and advises the government on pensions matters. It comprises representatives nominated by unions, employers, the government, pensions industry, trustees, consumers and pensioners.