Consultation on simplifying and reforming the pension system

[Brendan Burgess]

Consultation on Supplementary Pensions Reform has three sections.

I attach the briefing and the questions to be addressed in the first section.

Submissions should be made by the 19th Octobe. There is a lot of knowledge and common sense shown by Askaboutmoney posters on this issue. You should make submissions.

Brendan



A1. Do you agree that PRSAs, BoBs and RACs largely fulfil the same function for a
consumer and that it would be beneficial to simplify the DC contract landscape by
prospectively ceasing BoBs and RACs? If not, why?

A2. What, if any, positive or negative consequences would you foresee from the
prospective cessation of BoBs and RACs? What changes would be required to the
legislation governing PRSAs? What transitional measures would be required?

A3. What changes would you recommend to the design of the PRSA product?

A4. In terms of pension vehicle rationalisation, what impact could the introduction of
the pan-European Personal Pension Product (PEPP) have?

 

[Brendan Burgess]

This is very difficult to get excited about, but it's a really important issue.

I am trying to gather my thoughts in a coherent fashion in order to make a submission on behalf of the consumer.

My rough ideas are

1) The complexity of pensions and the variety of options deter people.
2) The complexity means that they need to go to an advisor which means that they will incur costs and will open themselves to bad advice and mis-selling.

A pension system should have the following criteria

• Simplicity so that a person can understand it without going to an advisor
  
• Equality between employees, the self-employed and company owners.
  
• Attractive to earners at all levels and not just those on the marginal rate
  
• Flexibility - can start and stop without penalty
  
• Access - Contributing to a pension scheme should not disadvantage a young person from buying a house

These criteria are easier to list than to show how they can be achieved.

 

[Thirsty]

Here's another one for you - allow diversity in pension provision.

if I invest €5,000 in to a pension fund, I'm allowed top rate tax relief, but investing the same capital into a property which is rented out does not.

Why can't I use a rented property as my pension provision? Why weight all the tax relief only if I invest into a 'fund'?