The Pensions Authority held a seminar on 27 January 2016 in Dublin where the Pensions Regulator, Brendan Kennedy, set out the Authority's plans for the industry for the next five years and highlighted areas which are a cause for concern.
The Pensions Regulator expressed concern with the current low interest rate environment and the negative affect this was having on pension scheme funding. Initially, it was hoped that the interest rates would bounce back, but the industry is slowly coming to the realisation that low interest rates may be with us for years to come. Market losses and market volatility were highlighted as other issues affecting the sector.
The Pensions Regulator highlighted that Defined Benefit (DB) pension schemes were still the focus of much attention of the Pensions Authority. There are over 700 DB schemes in Ireland. This number has fallen by approximately 400 in the last six years due to DB scheme wind-up. The Pensions Regulator emphasised that the key areas of concern from a DB perspective were poor communication, high charges and poor investment.
When it comes to Defined Contribution (DC) pension schemes, the Pensions Regulator believes that the gap that exists between a member's expectation and the reality of what a member receives at retirement is a problem. The Pensions Regulator stated that it was "worrying how many people don't know what to expect" when it came to retirement income. He indicated that poor administration and high costs were areas the Pensions Authority were focusing on.
In terms of the Pensions Authority's five year plan, the following were highlighted as specific goals:
Increasing the level of visible oversight of occupational pension schemes and PRSAs Setting clear expectations of trustees and pensions professionals Providing a reliable information service for the public Setting out...