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Shake-up for Irish pensions market as two new international firms add competition

The arrival of Vanguard and Royal London will put existing players – and particularly Irish Life – under pressure to improve their offerings

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At present, there is a distinct lack of competition in the Irish pensions market. It is hoped the arrival of two new players will push fees down. Photo: Stock image

At present, there is a distinct lack of competition in the Irish pensions market. It is hoped the arrival of two new players will push fees down. Photo: Stock image

At present, there is a distinct lack of competition in the Irish pensions market. It is hoped the arrival of two new players will push fees down. Photo: Stock image

THE pensions market is set for a shake-up after two big international providers said they plan to launch the first new retirement products in this country for years.

The launches are set to put existing players, particularly market leader Irish Life, under pressure.

New entrants could lead to lower charges all around, as the €7.5bn Irish pensions market has long been criticised for having high charges.

The entry of Royal London and a new Vanguard offering means they are the first to enter the Irish pensions market in years.

Broker Liam Ferguson of Carlow-based Ferga.com is set to start offering two low-cost personal pension offers from Vanguard, the second largest asset manager in the world.

Vanguard products are already sold by brokers through Standard Life, but Mr Ferguson said the version of the funds he is offering has lower fees than other channels.

Vanguard pensions via Standard Life are invested in Vanguard’s index-tracking funds.

Mr Ferguson said his offering will be annual charges as low as 0.45pc, which is less than half the annual charge of a standard PRSA (Personal Retirement Savings Account).

Mr Ferguson said it is an execution-only offering, with no financial advice included in the charges.

He said there are two options for pension savers taking up the Vanguard product.

There are a once-off 1pc set-up fee, and a 0.45pc annual charge.

The other option is no set-up fees and a 0.65pc annual charge.

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And Royal London, which has built up a profile here offering mortgage protection policies, plans to offer new pre and post-retirement products in Ireland.

It is initially offering Personal Retirement Bonds (PRBs) and Approved Retirement Funds (ARFs).

It said it was the first pension provider with zero policy fees and fund switching charges.

Royal London said its entry into the pensions market in Ireland was good news for pension savers as it will add to consumer choice, increase competition, and drive product improvements in the overall market.

The market here is dominated by Irish Life, which has been buying up a string of brokerages lately, with big market shares also held also by Bank of Ireland’s New Ireland, Zurich Life and Aviva Life and Pensions.

Mr Ferguson said: “After years of mergers and takeovers in the Irish pensions market, the choice of providers and funds has reduced considerably for the Irish consumer, which is never a good thing.”

He said Equitable Life, Quinn Life, Hibernian Life, Friends First, Scottish Provident, and Canada Life have all gone or been absorbed or merged into other pension companies.

“So we’re pleased to be able to offer low-cost Vanguard index-tracking funds to Irish pension customers with low up-front and ongoing charges.”

Vanguard has over $8trn under management with over 30 million investors around the globe.

Chief executive of Royal London Ireland Noel Freeley said his firm’s pensions products would give access to asset managers Royal London Asset Management and BlackRock.

Mr Freeley said: “The competition in Ireland’s pensions market has been largely unchanged for some time. New entrants are rare, primarily due to the level of investment required to deliver a high value product and the expertise demanded to build a robust service support platform.”

Meanwhile, a legislation proposed by Labour’s Ged Nash to make pensions charges more transparent has reached the second stage in the Dáil.


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