Tuesday 12 December 2017

Forgetful workers losing out on up to €1bn in pension entitlements

Charlie Weston Personal Finance Editor

WORKERS are missing out on up to €1bn worth of lost pension cash.

People who have changed jobs or whose company has been taken over by new owners are missing out on the money that could help fund their retirement.

And the winding up of company pension schemes is making the problem worse, according to the Independent Trustee Company (ITC).

If people are linked up with the missing money it could mean thousands of cash-strapped workers could benefit from extra pensions when they retire – funds they had forgotten about.

Managing director of ITC, Aidan McLoughlin, called for a new registry of all pensions funds to help match workers to missing pension money.

He said there was a need for a pensions tracing system, similar to the one in the UK, to be set up here.

Poor data collection in the past has meant that people running pension schemes often do not have contact details for people entitled to benefit from schemes, he said. Under law there is no requirement to keep in contact with former members of a scheme once they leave the company.

"It's difficult to forecast how many pension schemes' members won't remember to return for their money when they retire. But we would guesstimate that the total amount of money involved must be at least €200m and possibly up to €1bn," he said.

Mr McLoughlin said increased worker mobility meant that between 10pc and 15pc of members of schemes will have forgotten about some of the pension schemes they contributed to when they hit retirement age.

THOUSANDS

"In most cases, the beneficial owner is simply unaware that they have a previous entitlement or has forgotten that they have worked with employers where they were a member of a pension scheme," the Independent Trustee Company boss said. He added that the setting up of the Pensions Tracing Service in Britain meant that people were reunited with their lost retirement funds in about three-quarters of cases.

The research was revealed as the regulator for pensions, the Pensions Board, said poor record keeping by the administrators of company pension schemes could result in members not receiving all the benefits to which they were entitled.

Chief executive of the Pensions Board, Brendan Kennedy, said: "It is extraordinary that any administrator should be so unaware of its responsibilities that this situation should arise."

Irish Independent

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