Ex-Irish Life chief pans pension industry's power
FORMER head of Irish Life David Kingston has launched a broadside against the pensions industry, accusing it of having too much power.
Mr Kingston, who was chief executive of Irish Life for nearly 15 years and a former chairman of the stock exchange, said the industry was failing to adapt to wider changes in society.
Speaking at a conference on pensions organised by business advisory group Acuvet, where he is now chairman, Mr Kingston said the industry had a lack of focus in meeting the changing needs of employees.
There is an over-concentration on technical issues and a lack of focus on meeting changing employees needs, he said.
The former boss at Ireland's largest pensions provider, said the pensions industry was failing to put ordinary people who pay into pensions at the centre of attention.
Mr Kingston said that a key part of the problem with the pensions industry was that too much power had traditionally resided in the 'sell' side.
By this he means the pensions companies, the actuaries and the fund managers, rather than the employees and those who are on the side of the employees such as trustees and employers.
"The concentration of power on the 'sell' side has led, for example, to an over concentration on technical issues like investment performance to the detriment of creating solutions for real people's changing lives," he told the conference.
Mr Kingston said that the pension industry must now "start over" and fundamentally change the way it thinks of pension design, structure and management.
"The move to defined contribution schemes should mark a new period where companies think about the role of pensions and how best to support employees throughout their journey to retirement."
Many defined benefit schemes were closing, he said.
With a defined benefit scheme members get a pension based on their final salary and on their years of services.
But with a defined contribution scheme (DC), the pension depends on how much is in the employee's a fund when the person retires.
Acuvest said it advises companies on their pension strategies and has been to the forefront in calling for companies to change their whole approach to pensions, and to put the member at the centre of attention.
Mr Kingston retired as managing director of Irish Life a dozen years ago. After steering the company to a successful float out of government hands, he handed over to David Went.