Charges by pension fund managers to be probed
THE Government is seeking consultants to probe the charges imposed on pension funds by the fund management industry.
The news comes as new figures show a dramatic decline in the value of Irish pension funds last month, as worries about the world economy and the eurozone debt crisis led to big falls on stock markets.
Investment consulting company Rubicon said pension funds lost an average of 5.9pc of their value during August. Poor performance and high charges are seen as negatively impacting on pension fund returns.
The study to be commissioned by the Government into pension charges will attempt to identify all those charges which have the effect of reducing the level of contributions made to or invested in a scheme either by the employer or by the employee.
The probe will also look at the level of members' assets once invested. This will include contribution charges, administration charges, commissions, fund management charges, fund transfer fees and exit charges, a spokeswoman for the Department of Social Protection said.
The report is due to be completed by the end of the year, and comes in the wake of the Government's controversial levy on pension savers.
The Government introduced the 0.6pc charge on pensions as one of a number of measures designed to fund its so-called jobs initiative.
The levy will apply to the capital value of assets under management in Irish pension funds for four years, and is expected to raise €470m a year.