There is no doubt that the Irish pension industry is in dire straits. A conference in Dublin was told last week that too many people have a false sense of security just because they make regular contributions to a pension scheme. And up until now workers would have given little regard to the performance of their pension scheme, believing that upon retirement it’ll just be there to collect.
Managing director of Independent Trustee Company, Aidan McLoughlin said pension holders need to be aware of how their investments are performing.
“For those on defined benefit schemes the advice is to look at restructuring your benefits”, he said.
He said points to focus on include keeping the overall funding rate as high as is reasonable and trying to reduce or eliminate the amount you pay personally.
On defined contribution schemes, Mr McLoughlin said most of these involve personal contributions which the new tax rate of 33% will penalise.
“Trying to restructure how you are paid makes sense. Getting the employer to make all the contributions in return for other concessions on your part would be good planning on your part. However, care needs to be taken to ensure you don’t fall foul of the Revenue salary sacrifice rules,” he said.