The recently released OECD review of the Irish Pensions Systems might be a worthy tome but its recommendations risk over-reliance on state structures to the detriment of real competition for pension savers.
The paper focuses heavily on compulsory structures and auto-enrollment. The Pensions industry, will be focusing on lobbying for a private sector advice based system that will drive competition, thus creating greater value for the consumer and provide innovative solutions for both employers and employees in this space.
If any scheme is state-designed and run by a state agency, it is likely to offer only very conservative investment strategies given the potential political fallout of short term volatile investment returns and will likely fall short of its purpose.
Consumers risk being placed and left in unsuitable funds to their long term financial detriment.
If centralised, the cost of developing and administering the scheme will also be a burden to the taxpayer.
The time horizon for the implementation of any compulsory enrollment schemes is not immediate however and Ocean Finance will keep you informed of the work carried out in this area.
We have embedded a link the full report below which you can read at full screen and/or download or print. (Helpful hint) This is quite dense stuff so skip to page 150 to see the main points of the report summarized.
OECD-Review-of-the-Irish-Pensions-System [PDF}
