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William Fry Spring Breakfast Briefing Series 29 April 2009

William Fry Spring Breakfast Briefing Series 29 April 2009. PENSIONS - OVERCOMING THE CHALLENGES IN TODAY’S ECONOMIC CLIMATE. David Malone Head of Information The Pensions Board. The Pensions Board focus. Three key operational areas: Supervision, regulation and enforcement

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William Fry Spring Breakfast Briefing Series 29 April 2009

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  1. William Fry Spring Breakfast Briefing Series29 April 2009 PENSIONS - OVERCOMING THE CHALLENGES IN TODAY’S ECONOMIC CLIMATE David MaloneHead of InformationThe Pensions Board

  2. The Pensions Board focus Three key operational areas: • Supervision, regulation and enforcement • Policy, legal and actuarial • Information and awareness

  3. Numbers in Irish pensions • Company pension scheme 579,922 members in 1,271 DB schemes 272,197 members in 90,424 DC schemes • Personal Retirement Savings Accounts (PRSAs) 155,632 PRSA contracts in force (88,213 employers had signed up with a PRSA provider ) • Personal pension plans and Retirement Annuity Contracts (RACs) 200,000 plus contracts (Irish Insurance Federation) • Fund assets approximately €60 - €80 billion • Voluntary regime for supplementary pension provision (Figures at end December 2008)

  4. Changing World We Live In • We are living longer • More contract work • More mobility in careers • Changing work patterns • More part-time working • Single parent households • Smaller families • Separation/divorce

  5. Changing Demographics

  6. Why Have a Pension? Where will your income come from when you retire? The current State social welfare pension is €230.30 per week (or € 11,975.60 per year) …….will this be enough to meet all your needs in retirement? Almost 80% of the Pensions Board consumer research sample said that the State old age pension would NOT meet their needs in retirement

  7. Pension Adequacy • Pension expectations • Investment losses • Investment risk • Risk management

  8. DC Schemes Scheme members should be provided with: • adequate and understandable explanations of investment choices and risks • schemes should provide lower risk investment choices to members as they approach retirement • schemes should have well-designed default investment options for all members • scheme members themselves should also take an active role in their pensions

  9. DC Schemes Issues • Compulsory annuity purchase • Annuity purchase deferral • Statement of Reasonable Projection • Long term DC strategy (relax compulsory annuity purchase requirements?) • Pensions Board guidance

  10. DB Scheme Funding Current difficulties • over-reliance on outperformance of equities over other investments Actions taken • relief measures - extension to recovery periods • Government Pensions Framework • Pensions Board guidance

  11. Pensions Information Information Services Website Guidance & FAQs E-mail alerts Enquiry service Trustee supports www.pensionsboard.ie

  12. Regulation and Compliance • Risk based assessment • Misappropriation of scheme assets • Registered Administrators (RAs) • Board prosecutions and on-the-spot fines

  13. Thank You

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