Workers failed on pensions

Policy and regulatory failures have caused significant losses for hundreds of thousands of pension scheme members and seriously eroded confidence in the principle of pension provision, according to the Irish Congress of Trade Unions (ICTU).

Addressing a hearing on pensions at the Dáil Joint Committee on Education and Social Protection, ICTU official Fergus Whelan said few well informed workers believe their pension fund savings are safe.

He said state and pensions regulators had failed pension scheme members and those responsible for the mess – including successive governments, public officials, and the pensions industry – got it totally wrong. Among the policy and regulatory failures cited by Mr Whelan were:

  • Government and the regulator clung to a funding standard that artificially overvalued liabilities
  • Government levies on pension schemes, which he called a confiscation of pension savings, undermined schemes at the worst possible time;
  • Regulatory failure encouraged a flight from ‘defined benefit’ schemes and resulted in heavy losses for members.

Mr Whelan warned that many people close to retirement will “slowly descend into poverty from the moment they retire. But the fall into poverty will be rapid if high inflation returns.”

He welcomed Government plans to address the pensions crisis, but said it would not succeed without proper regulation. “Congress is concerned that the term ‘pension reform’ has become a euphemism to cover policy and regulation failure, the transfer of pension risk from employers to workers, and attacks on social security provision for the elderly,” he said.