The pensions watchdog has expressed concern that many workers are finding themselves with inadequate pension provision as a result of leaving it until close to retirement age to check out their entitlements.
Pensions Ombudsman Ger Deering said experience showed many members of pension schemes who had failed to establish what to expect from their pension fund were leaving little time to improve their position.
“In our experience many current scheme members are not familiar enough with the terms applying under their pension scheme or the basis of computing benefits thereunder,” said Mr Deering.
With longer life expectancy men and women currently aged 65 could expect to live to 86 and 88 years respectively, he said. “With an expectation of having 20-plus years in retirement there is a need to have sufficient benefits in place to provide an adequate income in retirement,” he said.
The Pensions Ombudsman deals with complaints in relation to occupational pension schemes, Personal Retirement Savings Accounts (PRSA) and Trust Retirement Annuity Contracts involving maladministration and financial loss.
Mr Deering acknowledged many individuals found the benefits and options “complex and confusing”. “In our experience many members pay scant attention to the benefit statements and reports they receive or find them confusing and indecipherable,” he said.
“However, if time and effort is not given by members to understanding the terms that apply under the pension scheme or PRSA, the process of maturing their retirement benefits can be a disappointing and fraught experience. They can arrive at retirement with an expectation of a type and level of benefit, which differs from the reality of what is available, with little opportunity to improve the situation,” said Mr Deering.
The Pensions Ombudsman said there was a large cohort of workers who might have either no pension or a reduced level of entitlements relating to periods of past service following the recession. “Very often it is not until retirement is fast approaching that details of prior pension benefits are sought,” he said.
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