IRELAND- Ireland’s Minister for Social and Family Affairs Mary Coughlan has set November 11th as the start up date for Personal Retirement Savings Accounts (PRSA) applications.
As of the 11th, the Pensions Board will accept applications from PRSA Providers for approval of their relevant products. The Board will then have up to three months to decide on these applications meaning the first PRSAs will be available in the first quarter of next year.
PRSAs are designed to offer the public a relatively simple, accessible and flexible means of saving for their retirement and they ultimately will replace additional voluntary contributions plans, personal pensions and transferplans, simplifying the pensions marketplace. The PRSA is designed to be a low-cost, easily accessible, long-term personal investment account.
Coughlan said: “the indications are positive that there is considerable interest being expressed in the PRSA business which will be of benefit to the consumer”.
It is hoped that pension industry players will come up with portable pension products thereby increasing pension coverage from about 50% to 70%.
The announcement comes at the same time that the Irish Association of Pension Funds warns that lower returns should be expected in future years.
The IAPF blames the recent equity market slump and it also believes that the high stock market levels reached in the 1990s will not be repeated in the future.
Irish pension funds have a significant exposure to equities and the fall in share prices will lead to a fall in the value of pension fund assets across the industry as a whole.