Pensions article was irresponsible

I READ with some horror the article on pensions by Paul Mills (Irish Examiner, September 28). This misleading and almost entirely inaccurate rubbish cannot pass without retort.

Financial experts, including business leaders, accountants and media commentators (notably Eddie Hobbs), almost universally agree that a well structured pension arrangement is among the best investments any taxpayer can make.

If Mr Mills has had a bad experience of pensions, let him air it, but his negative generalities only frighten people into avoiding what is a crucially important subject for everyone.

There exists a raft of pensions’ legislation, which is constantly being expanded, to protect members of pension schemes, provide them with meaningful information and ensure employers and trustees are meeting responsibilities.

Mr Mills’ use of terms such as “looted the pension schemes”, “dipped into the pension fund”, and “pouring money into a black hole” may negatively influence the very people who need to provide for their own future. Will Mr Mills pay their bills and lifestyle expenses during retirement?

Contributing to a pension policy is not “pouring money into a black hole”. It is a prudent action that allows an already burdened taxpayer the opportunity to reduce their tax bill by investing money in a pension fund — a fund (other than in defined benefit schemes) which is chosen by the individual, from a deposit-type fund, to property to equities.

Mr Mills also refers to stock market crashes but fails to mention the superb returns achieved over medium to long terms (which pension funds almost invariably are) despite market fluctuations. Furthermore, many pension schemes provide valuable death-in-service benefits as well as pension benefits.

Mr Mills asserts that we have all heard horror stories. This is not a perfect industry, but show me one that is. Thankfully, horror stories are the exception rather than the rule. We have a National Pensions Board and a Pensions Ombudsman along with a Financial Regulator to ensure such horror stories will not happen again.

Mr Mills also says he doesn’t understand what he is getting into with a pension. Here’s the deal: you save money, tax-efficiently, over your working lifetime, review it regularly and draw an income from it when you retire. Does Mr Mills get his annual benefit statement, required by law? Does he read it? If he doesn’t understand it, why doesn’t he talk to an independent financial adviser!?

As regards employers looting pension schemes, Mr Mills failed to make reference to the protections offered by legislation, most notably the 1990 Pensions Act.

I’m not saying these protections are foolproof but looting a pension fund is far from the simple procedure Mr Mills makes it out to be. No legislation can always stop a determined thief.

John Lucey

Traders Financial Services

South Link Park

Ballycurreen

Airport Road

Cork