Massive Spike in Employees’ Interest in Pensions

Survey Reveals Pension Holders’ Concern Following Years of Abysmal Pension Performance

In a new survey undertaken by leading pension advisors and administrators IFG Corporate Pensions, it was revealed that 87% of those surveyed said that since the start of the recession, their employees have been showing far more interest in their pensions and much of this interest came in the form of criticism of their pension’s performance and lack of visibility on charges. The survey asked HR and finance professionals who are in charge of corporate pension schemes to indicate the change in the behaviour of pension savers.

According to Fionán O’Sullivan, Director of Corporate Pensions at IFG Corporate Pensions, “Employees are finally realising that with the growing levels of negative equity, their pension represents their primary and, in some cases, their only asset.  In the past most employees took little interest in their pension until close to retirement, but with the increases in the relative importance of it and the horrific stories circulating about Defined Benefit arrangements, employees have been inundating pension trustees with questions on their rights and concerns over the performance of pension funds”.

Fionán continued, “The results of our survey suggest a dire need for pension providers to challenge industry norms and deliver results for an ever growing despondent and worried pension public. Pension savers are looking at their pensions more closely now and are also looking for someone to blame when performance is poor – 71% of our respondents say that pension savers hold employers and/or trustees primarily responsible for the performance of corporate pension schemes. What the pension industry needs to do now is twofold – educate savers as to how their fund is managed and who controls it, and deliver better and more consistent results over the long term. This was always going to happen as members of pension schemes started to realise that in a Defined Contribution scheme it is the member that is taking the entire investment risk”.

The IFG Corporate Survey showed in no uncertain terms that pension scheme members are beginning to sit up and take notice of their pension fund.

Fionán went on to say, “It’s encouraging to see that the Irish public are taking a greater interest in their pensions than ever before… 44% of our respondents said that are being asked more questions by pension savers on a regular basis, 5% said they get more complaints and another 38% say they get more complaints as well as questions. As an employer or pension trustee it’s not an attractive prospect to see an increase in complaints however as an industry we need to look at this as an opportunity to communicate to pension savers – people who prior to this would not have wanted to hear about or listen to pension rhetoric”.

When asked if Ireland’s pension savers are living up to their reputation of being ambivalent to details of their pensions provisions while being far more aware of their banks savings and/ or other assets, the respondents answered as following:

–       38% yes
–       59% yes but they are becoming more  aware of their pension too
–       3% no
Fionán concluded, “We are definitely seeing a gradual change in consumer sentiment in relation to pensions and we as an industry need to move with this and adapt accordingly”.