Pension funds - Blind faith is no longer sufficient
Too many people seem to have a blind confidence in their pension scheme just because they make regular contributions. They just assume the pension will be sufficient to meet their needs when they retire.
The 266,000 Irish people in defined contribution (DC) pension schemes should realise that they need to be saving between 15% and 20% of their salary. The losses following the recent market collapse should be a stark warning of the need to address the pensions issue.
While some of the losses have been clawed back, Marie Collins, the chairwoman of the IAPF, stressed that the DC schemes should be designed to “meet the needs of even the non-interested DC member”.
It is in everybody’s interest that there should be more transparency in the whole pension market. The pension scheme should be explained in terms that are readily understood, not a labyrinth of legal jargon that is more likely to confuse than enlighten the average reader. People should know how much they are putting in and how much they will get out.
There should be ready access to such information. If there will be a shortfall on their expectations, subscribers should either increase their contributions now to bridge the gap, or lower their expectations.
Pension funds are subject to the markets, but there must be a more efficient way of looking at the whole pension issue.
This is one of the biggest concerns facing our society. There is going to be a huge bill and it does not look like we are set up to pay it.
We should be making sure as a society that people’s needs would be met and that another generation will not be saddled with the bill. Pensions have become big business, with enormous investment potential. When the investments are going well everybody wins, but it is the pensioners who pay the price when the investments go wrong, as so many people have recently learned to their own cost.
There must be a more secure system that is not sodependent on speculation. The ultimate aim should be security in old age, and not simply profit based on parasitic investing, which amounts to gambling.
The pension funds should be regulated for the benefit of pensioners rather than the investment agency. It is time for Government to take the lead on this issue in order to ensure that society as a whole faces up to the problem in a realistic way.
The present market driven system does not seem to be working properly. The Government and society as a whole should approach the pension issue as a public service in which the subscribers are kept fully aware that their funds are cautiously invested to secure a slow but definite return, so that their futures are not at the mercy of speculators.
