Dáil Éireann Debate, Tuesday - 4 July 2023
397. Deputy Ged Nash asked the Minister for Social Protection when she plans to introduce a pensions cost-transparency initiative, as referenced in the Pensions (Amendment) (Transparency in Charges) Bill 2021 Second Stage Dáil Éireann debate on 22 September 2022; and if she will make a statement on the matter. [32434/23]
View answer398. Deputy Ged Nash asked the Minister for Social Protection if her Department has carried out an “examination and assessment of the issues pertaining to the provision of information to pension scheme members in relation to costs and charges incurred by pension schemes and, if deemed to be required, to identify and develop the appropriate policy responses and associated methodologies”, as referenced in her Second Stage speech on 22 September 2022 on the Pensions (Amendment) (Transparency in Charges) Bill 2021; and if she will make a statement on the matter. [32435/23]
View answerI propose to take Questions Nos. 397 and 398 together.
Firstly, as I acknowledged during the Second Stage debate on the Pensions (Amendment) (Transparency in Charges) Bill 2021, it is recognised that improved pension costs transparency and better outcomes for pension savers are always desirable. The availability of comprehensive and transparent information on costs and charges is important and helps consumers to decide whether investments represent value for money.
Last July, the Pensions Council published its report on the issue of pension costs in Irish schemes, including issues with regard to the transparency of these costs. Specifically, the Council examined the merits of introducing a Cost Transparency Initiative, similar to that in the UK, Denmark and the Netherlands. The Council agreed that there would be merit in introducing a cost transparency initiative, that the analysis of charges should be straightforward and allow easy comparisons to be made. The Council favoured mandatory cost disclosure but recognised that this may take time to achieve.
The view of the Pensions Council is that any cost transparency framework would include all types of pensions provision where pension saver fund values are impacted by costs incurred and acknowledges that the wider the range, the greater the technical complexity of drawing up rules that treat each type of pension vehicle consistently.
Over the past year, the recommendations contained in the Council’s report were considered by my officials. This examination has required ongoing engagement with the Pensions Authority to identify the relevant appropriate policy responses to the measures contained in this report and the proposed provisions in the Pensions (Amendment) (Transparency in Charges) Bill 2021.
The Pensions Authority is also actively consulting with the pensions industry on the issue of costs transparency and it is expected that proposals in relation to this engagement will be available shortly. The Department is awaiting the outcome of the Authority’s consultation with industry and any proposals stemming therefrom before concluding its overall examination of the relevant issues.
As the deputy will also be aware, the pension system in Ireland is undergoing a period of significant change arising from such matters as:
• the enhanced governance and regulatory requirements arising from the transposition of IORPs which is currently driving the consolidation of a smaller pension schemes into Master Trusts;
• the recent introduction of additional disclosure obligations on trustees including the provision of Pension Benefit Statement; and
• the forthcoming introduction of Auto-enrolment.
Once the Department has concluded its overall examination of the relevant issues, it will report to the Dáil on its findings and proposed future next steps.
I hope this clarifies matters for the Deputy and I would like to thank him again for his work in this area.
