IRELAND - Mary Hanafin, minister for social and family affairs in Ireland, said the national pensions framework will be published in the next few months but admitted the implementation of Irish pension reforms could be delayed until 2014.
Speaking at the launch of the Pension Ombudsman's annual report for 2008, Hanafin said one of the objectives in reforming the pension system is to "simplify the pensions environment and to ensure that people are made more aware, when saving for retirement, of how much they are saving and the type of investment product they are in".
However, following comments last month stating any pension reforms would have a "lead-in time", pensions experts say Hanafin also suggested the implementation of the new framework - once it is published - would not be until 2014. (See earlier IPE article: Irish pensions framework to have lead-in time)
The ministry of social and family affairs confirmed that Hanafin had previously stated "there would be a likely lead-in time of at least three years to commence implementation of the framework. This is to allow for the appropriate systems to be put in place for measures arising from the implementation of the framework".
Jerry Moriarty, director of policy at the Irish Association of Pension Funds (IAPF), noted while Hanafin had suggested any structural changes to the system would not come into effect until 2014, the issue of tax relief changes could still be included in next week's budget.
And he warned: "I would be very concerned if there was to be a radical change in tax relief without any impact analysis and in advance of setting out a long-term strategy for pension provision in Ireland."
The minister also used the Ombudsman report launch as an opportunity to call for improved education for trustees - ahead of the implementation of a legal requirement on employers to offer trustee training - and for a better approach to the investment strategy for default funds.
She said: "I would like to see a situation where default funds include lifestyling as a matter of course and that members are appropriately informed about the risks involved in opting for alternative investment routes."
Paul Kenny, the Pensions Ombudsman, meanwhile revealed there has been a 76% increase in complaints in the first 11 months of 2009 compared to the same period in 2008. This is almost double the 47% increase reported for the full year of 2008 against 2007.
He noted that 2008 ended with 473 open cases still to be handled - an increase of 34% from the beginning of the year. Of these, an increasing number related to the construction industry and employers either failing to register employees with the compulsory Construction Workers Pension Scheme (CWPS), or failing to make the appropriate contributions.
His office was therefore involved in 16 court actions in 2008 against construction firms for various offences, and achieved success in each case with defendants receiving fines and/or criminal convictions.
In his annual report, Kenny also highlighted the "urgent need" for a 'shared services' approach to the administration of public service pensions, as he warned: "I see at first hand the terribly uneven administration that occurs. It is simply not right that people of similar grades may get different pensions because of a different interpretation of the same scheme rules by local pension administrators in local authorities or the HSE."
Kenny argued mistakes are made through skills shortages and people become dissatisfied with their pension arrangements, which in turn leads to an administrative review and eventually complaints to the Ombudsman.
"It would make great sense to establish and maintain a corps of skilled individuals to look after these areas and avoid the need to devote scarce resources to resolving problems that really should not have arisen in the first place."
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