Call for legislation to make all pension charges transparent
Workers are still finding it impossible to access all the costs involved in funding their pensions because pension providers are not legally obliged to disclose charges, Rachael Ryan of SIPTU’s Legal Department told the Technical Engineering and Electrical Union (TEEU) conference in Portlaoise on Friday (16th November).
“Union members in Defined Benefit schemes are generally better off on every level “, she said. “They tend to be the larger companies and trustees have more control. But every day I am dealing with members who send in statements to me with no details of the charges. These can account to as much as 52% of funds that range from investment fund charges, to administration fees, and consultancy fees to charges for annual reports.
“We have been calling for legislation to make full disclosure of fees compulsory for years and with the mounting unease over abuse of schemes it is long past time for the Government to act.”
One TEEU member said a third of his father’s pension contributions had been deducted in fees and it had proven impossible to obtain the details.
Pensions Ombudsman Paul Kenny told the conference that the recent report by the Department of Social Protection into the industry had shown the costs had fallen hardest on those in small Direct Contribution schemes. If people left an employment then the charges would continue to eat into their funds.
When funds were increasing in value this did not matter, but during the present economic crisis, when values were falling, the charges were taking an increasing slice of the clients’ investment. Nor was there any incentive for brokers to transfer clients into a better scheme, especially if it could affect their own commission.
He said accountants were not allowed to charge commission for their services but he had come across a case where commission had been awarded to a company run by the accountant’s wife. He described such behaviour “immoral and disgraceful”. The basic lesson for people was to constantly review their policy.
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