Society of Actuaries criticises government's approach to taxing auto-enrolment

JimmyB99 said:
I'll try again!

If an employer doesn't offer an alternative to the AE scheme, then the employee has the following choices:
- to join the AE scheme
- to join a completely self-funded scheme (and thereby foregoing the employer contributions otherwise payable in an AE scheme)
- to join no scheme at all.

Do you agree that these are the three available options?
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Obviously if the employer does not facilitate an alternative, then there is no alternative.
Clearly Colm meant (in the context of a radio interview and the DSP also meant) that the employee/employer combine were not forced to implement AE nor forced to make it the only available alternative.
Bizarrely though the DSP defended the 1 for 3 top-up being half of 40% tax relief by citing the employer contribution and "other advantages" of AE.
 
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Well I'm glad someone understands what Colm means!!:) The truth is we have now changed from what he MEANT from what he SAID!!
 
JimmyB99 said:
Well I'm glad someone understands what Colm means!!:) The truth is we have now changed from what he MEANT from what he SAID!!
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He did NOT say that an employee had an alternative where they effectively had none. He SAID they (clearly implying the employee/employer) could choose a conventional arrangement.
 
No he didn't

Transcribe the conversation - I just listened back - it's at c. 3 minutes - what you're saying is just not true. This is just revisionism. I don't agree. Brendan didn't agree. Jas didn't agree.! The whole point in relation to that other thread (in relation to this error) is that it is not the employee's choice. I get it that you're his mate but this is really annoying at this stage.

Question: Do you agree that it's no skin off the employer's nose to set up a second pension scheme as Colm suggested?
 
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This old rabbit is damn glad he stayed chewing lettuce for the last while!
 
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JimmyB99 said:
No he didn't

Transcribe the conversation - I just listened back - it's at c. 3 minutes - what you're saying is just not true. This is just revisionism. I don't agree. Brendan didn't agree. Jas didn't agree.! The whole point in relation to that other thread (in relation to this error) is that it is not the employee's choice. I get it that you're his mate but this is really annoying at this stage.

Question: Do you agree that it's no skin off the employer's nose to set up a second pension scheme as Colm suggested?
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Ah! Personalising it, I thought you were better than that. Not sure why you brought in the point about the former Pensions Ombudsman and Pat Kenny being brothers. Are you suggesting a conspiracy afoot?

These are effectively employer sponsored schemes. Clearly if the employer chooses a scheme the employee has no effective choice. This will be the case no matter how AE pans out. As proposed AE will have a choice of low/medium/high risk funds, really quite limited compared to the zillion on offer in the conventional market. The implication that making AE just one fund fundamentally alters that situation would be silly and for some reason you are misinterpreting Colm as saying that.
Colm was not arguing or implying that his proposal increased employee choice compared to what is currently on the table. Colm was, as you point out, merely echoing the DSP assertion.
 
Duke of Marmalade said:
Ah! Personalising it, I thought you were better than that. Not sure why you brought in the point about the former Pensions Ombudsman and Pat Kenny being brothers. Are you suggesting a conspiracy afoot?
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No conspiracy whatsoever.

Duke of Marmalade said:
The implication that making AE just one fund fundamentally alters that situation would be silly and for some reason you are misinterpreting Colm as saying that.
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Not a clue what you are trying to say here?

Duke of Marmalade said:
Colm was not arguing or implying that his proposal increased employee choice compared to what is currently on the table.
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Please read the other thread - no point in rehashing here what was said there or there'll be even more references to burrows.:rolleyes: No one (not me, Jas or Brendan) is remotely suggesting the above! Somewhat puzzled by what on earth prompted its inclusion?

What I said in post 17 is my central point. If you have specific, precise questions into that post, I will be happy to answer them. I note that my specific question was not answered!
 
JimmyB99 said:
What I said in post 17 is my central point. If you have specific, precise questions into that post, I will be happy to answer them. I note that my specific question was not answered!
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JimmyB99 post 17 said:
In fairness, it's not just the Department that has peddled this line - Colm Fagan came out with more or less the same line when he was being interviewed by the former Pensions Ombudsman's brother a few weeks ago. When it was pointed out to him (even by Brendan) that this was not correct, he refused to acknowledge the point.
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Not sure what the "specific question" is? If you are asking me do I agree that the DSP and Colm are telling porkies, the answer is No.
If you are asking me is the former Pensions Ombudsman's brother Pat Kenny, the answer is Yes. Can you tell me why this is relevant; you did invite questions on this post so I look forward to the answer that you will be "happy to give".
This is such a rabbit hole with no relevance at all for OP.
 
JimmyB99 said:
Question: Do you agree that it's no skin off the employer's nose to set up a second pension scheme as Colm suggested?
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It was even marked, Question. Hmmmm. My guess is that you're intentionally trying to mudding the waters?

Anyway, can you answer the above question please?

Can you also answer what advice you would give an employer as to whether he should set up a parallel scheme, with the same employer contribution structure as per AE, in the hypothetical situation that Colm's proposal is adopted for AE?
 
JimmyB99 said:
It was even marked, Question. Hmmmm. My guess is that you're intentionally trying to mudding the waters?

Anyway, can you answer the above question please?

Can you also answer what advice you would give an employer as to whether he should set up a parallel scheme, with the same employer contribution structure as per AE, in the hypothetical situation that Colm's proposal is adopted for AE?
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Ah! You meant #24 instead of #17. 7 posts is a long time on AAM.
So you are accusing Colm not of porkies but of not taking 10 mins to explain to Pat that the alternative would require either not having an AE scheme or having 2 schemes with loss of some of the employer’s nasal skin, which of course is the answer Yes to your Q.
Question: What is the relevance of the former PO being a brother to Pat Kenny for this thread?
 
I agree that #17 was a typo and should indeed be #24. No biggie. Is this your gotcha moment or something?!

I see you still refuse my two questions clearly. Can you have another go at the nasal skin question (and answer simply and clearly) and address the second question please?

There is no particular relevance to the comment that Pat and Paul are brothers. This is just more, frankly somewhat sad diversionary tactics! It's not, by the way, a gotcha either.

Just answer the questions clearly please if you are genuinely interested in debating the issue - which, to be honest, I suspect you are not!
 
JimmyB99 said:
I agree that #17 was a typo and should indeed be #24. No biggie. Is this your gotcha moment or something?!
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You gave me an open goal, do you expect me to turn that down? :)
JimmyB99 said:
I see you still refuse my two questions clearly. Can you have another go at the nasal skin question (and answer simply and clearly) and address the second question please?
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YES for the second time to Q1.
Please tell me how this justifies the following assertion of yours (in bold).
In fairness, it's not just the Department that has peddled this line - Colm Fagan came out with more or less the same line when he was being interviewed by the former Pensions Ombudsman's brother a few weeks ago. When it was pointed out to him (even by Brendan) that this was not correct, he refused to acknowledge the point.
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At worst Colm's answer on this minor detail was economical. As we have seen from this thread, to have gone into the ifs and buts would have been a total waste of valuable airtime.

On Q2 there will need to be 2 schemes anyway because of the ridiculous tax anomalies - making AE worse for higher rate taxpayers and AE better for others. But hypothetically restricting it to it being only a case of whether the employer should provide an alternative to facilitate broader investment choice, my personal advice would be that there is no such need (but definitely not verboten), but then I am not a qualified financial advisor.

JimmyB99 said:
There is no particular relevance to the comment that Pat and Paul are brothers. This is just more, frankly somewhat sad diversionary tactics! It's not, by the way, a gotcha either.
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Definitely not a gotcha. But forgive me for feeling that you meant more than a bit of social gossip here.
JimmyB99 said:
Just answer the questions clearly please if you are genuinely interested in debating the issue - which, to be honest, I suspect you are not!
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Thanks for the honesty but your suspicion is ill founded.
The overall tone of your comments suggests that you have taken an almost personal antipathy to the whole proposal and not just this minor detail.
 
Duke of Marmalade said:
My personal advice would be that there is no such need (but definitely not verboten), but then I am not a qualified financial advisor.
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My very strong view is that it is not a good idea for an employer to offer an alternate scheme to the AE scheme. I have seen nothing on these threads that has given me reason to reconsider. I have also taken professional advice on this.
 
Louisval said:
My very strong view is that it is not a good idea for an employer to offer an alternate scheme to the AE scheme. I have seen nothing on these threads that has given me reason to reconsider. I have also taken professional advice on this.
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It depends on the employers circumstances. If they want to attract excellent employees who are higher rate taxpayers, AE is not going to work for them.
 
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Fortune said:
It depends on the employers circumstances.
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It does indeed. I should have qualified that I was referring to the universal access of a parallel system.
Just to be clear, I'm not saying that all employers will/should not offer an alternative to AE. I explained some of our initial thinking earlier in this thread and in another thread. My guess is that our approach will be the majority one (from talking with other employers) as running parallel systems will be too cumbersome, of dubious real benefit and present employers with risks they don't need. Also, just to say, offering an alternative pension arrangement will not be a key differentiator in our company's search for talent. Again, I suspect this may well be true for many (but obviously not all) employers.
One final point is that pension schemes last a long time. The current anomalies regarding the tax treatment may well not be permanent. As the introduction of AW approaches, there seems to be more noise/pressure about this. However, I understand that as things stand (and don't change), special accommodations may, ultimately, be required for sub-groups within the overall AE cohort.
 
One very basic reality. To begin with AE will be 1.5% from EE and also from ER. For this reason alone any employer looking for talent will need a second scheme or at least a facility where they top up PRSAs.
 
@Louisval - I totally agree with your posts. Some employers may offer to redirect contributions that would otherwise be available under AE into a parallel scheme and some employers may not so offer. No one knows the relative percentages, etc. As you also correctly say, employers may end up offering to contribute to parallel arrangements to some but not all employees. It doesn't have to be a one size fits all.

All we know for sure is that it's not a given that employer contributions that would be payable to the AE scheme will also automatically be available to a parallel scheme.
 
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