Pensions...
Weathering The Storm

WORDS: JILL KERBY

Still no pension? Join the club. Fewer than half of adult working women in this country have an occupational or private pension. Thousands won’t even qualify for a contributory state pension. We have stuff… or we have stuff and kids and husbands.
Just no pensions

Financial advisors I know — even the good ones who take their work seriously and charge appropriate fees for their time and expertise and genuinely care that their clients don’t get ripped off — say that ‘pensions’ is a hard sell no matter how well or badly the economy is doing.

It’s especially impossible to get younger people to think about them, said one, rather nostalgically, “though clearly when you have extra dosh in your pockets and you’re liable to higher rate tax and PRSI, dangling the tax deduction carrot in front of people can, well, used to, secure a sale.”

The biggest problem isn’t even the lousy fund performance racked up by the vast majority of Irish managed pension funds — near zero over ten years, or less than zero when adjusted for inflation. Instead it is the idea that you need to lock away 15%, 20%, 30% or more of your monthly salary for 30 or 40 years with no access to this money and no guarantee that you’ll end up with an investment fund that represents anything near the 5% or 6% projection growth rates that are used to illustrate how your new pension fund might perform once the 30 or 40 years worth of charges, fees and commissions to all the salesmen, middle men, administrators, actuaries, fund managers and regulators get paid off first.

Read more of Pensions in the Spring 2010 issue of WMB, on newsstands now!