When it comes to pension reform, delay comes at a cost

The clock is ticking. A key element of the auto-enrolment process is a central processing authority which will be charged with managing the system. When the UK set about introducing its mandatory workplace pension scheme, it took over five years to get its equivalent scheme administrator to the point where they could start enrolling workers in the scheme. Expecting Ireland to replicate that process in a fraction of the time seems fanciful.

The last election campaign triggered a fundamental rethink of the State pension. That has had two significant outcomes. First, for largely political reasons, the State has now signed up to an arrangement that will inevitably see a significant increase in taxation to preserve the financial viability of the State pension. And, second, any debate around further reform in the medium-term has now been rendered so toxic electorally that no political party will have any incentive to address it.

Delay would be a mistake. There are clearly issues with the scheme as currently envisaged – not least that it seems destined only to further institutionalise the gender disparity in pensions that sees women generally poorer in retirement – but consigning those 750,000 workers to a future where they must depend only on the increasingly fragile funding of the State pension doesn’t seem like a reasonable position.

But even beyond this cohort, consumers are still paying more than they need. The study of 5,500 home and motor insurance customers found that only around one in four switch provider although as many as 80 per cent do get in touch with their insurer at renewal time. It seems that simply by reducing the premium, insurers can hold on to customers even where there are better offers available to that consumer in the market.

Source: Insurance Report (insurancereport.net)

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