Dáil Éireann Debate, Tuesday - 6 November 2012
549. Deputy Denis Naughten asked the Minister for Social Protection following the report by her Department into the high administration cost of pension schemes, the steps she is taking to address this situation; if she is satisfied that the pension industry is regulated to international norms and is properly policed; and if she will make a statement on the matter. [47918/12]
View answerThe Report on Pension Charges 2012 was undertaken by my Department with support from the Central Bank and Pensions Board. The primary objective of the report was to gather information on the level of pension charges levied, to assess whether these charges are reasonable and transparent, to report on the findings and to make recommendations.
The report highlights a wide range of issues in relation to pension charges and identifies a number of serious problems. It is fully recognised that the provision of pension schemes cannot be cost free. However, there are major challenges to be addressed in the two main areas of reasonableness and transparency of charges.
In recent years a number of initiatives have been progressed at Irish and EU level which focused on the area of disclosure and transparency of pension charges. These initiatives included the publication of the revised Consumer Protection Code by the Central Bank in 2012 and the recent consultation paper by the Pensions Board on pension simplification. At EU level, my department will be monitoring development across a range of proposals which are currently under consideration and will be progressed during 2013. The outcome of these developments will inform a review of relevant regulatory framework in Ireland.
The report is a fact finding report, comments from interested parties and stakeholders are being invited over a 3 month period (i.e. by the end of January 2013). These responses will be considered and a further policy and regulatory response, if necessary, will be brought to Government.
On the broader pension policy front, the report clearly identifies the importance of economies of scale in driving down charges. At present, the OECD is conducting a review of longer term pension policy and will comment on key policy issues such as the possible introduction of an auto-enrolment pension scheme for all employees, which could have a major impact on reducing charges.
