IAPF Conference: CFOPS on pan-European funds
IRELAND - Phelim O'Reilly, the general manager of the Irish Construction Federation Executive Pension Scheme has called for a pan-European pension fund for mobile workers such as those in the construction sector.
Speaking at today's Irish Association of Pension Funds annual conference in Dublin, O'Reilly said: "There will be a lot of movement within the construction industry and there is quite a lot to be said for a pan-European fund."
The Construction Federation is part of the European Association of Paritarian Institutions' (AEIP) European construction pensions task force, looking at the impact of portable pension on the construction sector.
Even in the Irish construction market a pan-European pension scheme that "offers complete mobility that allows workers when they move from one employer to another can actually continue in the pension scheme - that has quite significant advantages for the workers in that industry".
O'Reilly was strongly in favour of defined contribution (DC) pension schemes and called the defined benefit schemes "a golden handcuff" for mobile workers.
"DB reduces your freedom to move and you will end up with a contribution that is significantly lower than DC," he said, adding: "A young mobile worker should always ask for an equivalent DC contribution, rather than DB."
Furthermore, he argued that DB schemes depress salary increases downwards in later years, and that the DB transfer value is lower than that of DC schemes, or might not even be available at all.