Success of pensions plans ‘distorted’
CAI director and spokesman on finance, Eddie Hobbs, says the figures published for PRSA uptake by the Pensions Board, in a new review, do not reflect the uptake by new entrants to the pensions market.
The Pensions Board claimed the sale of 26,899 PRSAs since their introduction back in February of this year. It failed to properly inform the public, however, that much of the sales were substitute sales for personal pensions.
Personal pensions largely taken up by the self-employed accounted for 83,111 in 2002 and the combined sales for personal pensions and PRSAs in 2003 were less at 81,201, he said.
The data released by the Pensions Board indicates that 26,899 were sold, but of those, 14,435 were not through employer schemes. The underlying reality is that the 12,264 plans sold through employer deduction schemes is a more accurate measure of the net increase in the personal pensions market, he said.
Mr Hobbs said the number may be even less given the normal exponential increase in Additional Voluntary Contributions (AVCs) which have been substituted by PRSAs.
Substitute selling is also evident from the fact that the large bank assurance sales forces have completely switched to selling PRSAs instead of personal pensions.
