The Deputy’s question relates to 'standard private pension products'. In terms of the Pensions Act, 1990, as amended, this refers to standard Personal Retirement Savings Accounts (PRSAs). Personal Pension Plans (PPPs) / Retirement Annuity Contracts (RACs) and other retirement related investment products are regulated by the Central Bank. Any questions with respect to these are appropriate to the Minister for Finance.
Standard PRSAs have predetermined charging structures. In a standard PRSA, as per Section 104 of the Pensions Act, total charges are already capped in two ways - a 5% cap on each contribution and a maximum of 1% per year on the fund value.
The 2012 Report on Pension Charges in Ireland, undertaken by the Department of Social Protection in consultation with the Pensions Authority and the Central Bank, considered the scale and variability of pension charges across different types of pension arrangements. The report stated that the most transparent product from a charges information perspective is the PRSA. Both its charging structures and rates are addressed in regulation and the information provided in relation to them in the Statement of Reasonable Projection is relatively transparent.
As per the 2012 report, PRSAs have a reduction in yield (a method of expressing total % charges) ranging from 1.27% to 1.57%. There is no figure available for the EU average.
I have recently written to the Pension Council requesting that they consider the issue of pension costs in Irish schemes, including issues with regard to the transparency of these costs. Specifically, I have asked the Council to consider the merits of introducing a Cost Transparency Initiative, along the lines of similar initiatives in the UK, Denmark and the Netherlands.
I hope this clarifies the matter for the Deputy.