New ombudsman targets pensions

MEMBERS of pension funds shortchanged by their schemes can count on the new ombudsman to fight their cause.

Paul Kenny, who is due to take up office in July, pledged last night that those “who believed they had suffered loss” as a result of poorly run schemes including PRSA’s will have their cases thoroughly investigated by him.

Mr Kenny was speaking at an Irish Association of Pension Funds seminar in Dublin last night when he pledged to target badly administered pension schemes and the new PRSA retirement plans.

Mr Kenny said he will do all in his power to police the pension fund market, but stressed he would be unable to solve all the pension problems of the world.

His brief will be to scrutinise funds that have suffered losses as a result of dishonest or incompetently operated pension plans.

The IAPF welcomed Mr Kenny’s appointment as a “landmark” development in Irish pensions history because of the back-up support it will give to pension fund members.

Patrick Burke of IAPF said: “we expect that the establishment of the office and the appointment of Mr Kenny will result in an enhancement of the manner in which pension schemes are managed by trustees, employers and service providers and this will be of benefit to members.”

Giving a further glimpse into the future, Mercer executive Sean Holland said new technology will radically alter how members deal with their funding needs.

New software, he said, will allow members to project their retirement savings forward based on existing investments and work out what current contributions are likely to deliver on retirement.

Called Enhanced Administration Platforms they will also calculate additional contributions required to meet pension expectations and can take account of a variety of likely investment returns from here to retirement, giving individuals a much better sense of control over their own retirement plans.

Una Halligan of Hewlett Packard warned that the changing pensions environment placed much heavier demands on the individual to ensure their pensions meet their retirement requirements.

It will require the industry to communicate to members in a more user friendly manner, she said. This is because the shift to defined contribution plans places the entire burden on adequacy of investment on the shoulders of the individual.

“It is more important then ever to equip members with the information necessary to enable them to make their investment choices and to plan their retirement savings”, she said.

Following criticism of the industry in Britain, Giannis Waymouth, of law firm Freshfields Bruckhaus Deringer, said the sector came up with a Model Administration Agreement for use by trustees employers and administrators.

That move has made clear the standard of service trustees and firms can expect to get from their fund manages.

Ireland would do well to adopt such an agreement, she said.