Fianna Fáil Finance Spokesperson Michael McGrath has called for the establishment of a national pension tracing service to assist people to obtain details of pension entitlements they may have lost track of.
Deputy McGrath commented, “Work patterns have changed considerably over recent decades. Few people now expect to be with the same employer throughout their career. It is not inconceivable that someone could build up entitlements across up to 10 different employers over their lifetime. A more mobile and transient workforce means that pension schemes are building up far greater numbers of deferred pensioners. There is a real risk that many people are not getting the full pension benefits that they are entitled to.
“In the UK, the government took a proactive approach to the issue by establishing the Pension Tracing Service. It received over 145,000 queries last year and succeeded in putting nearly 90% of people in touch with a former pension provider. Given that Ireland has a broadly similar pension system to the UK, there could be anything up to 10,000 people annually who would benefit from a similar service here.
“Estimates from the pensions industry suggest that between €500m and €1bn of pension assets in Ireland are currently unclaimed. It is important that every effort is made to help people obtain their entitlements.
“Last year, the Tánaiste and Minster for Social Protection told me in a parliamentary reply that ‘Consideration is being given to developing more streamlined mechanisms to assist both scheme trustees and individuals trace accrued pension rights.’ The Minister recently advised me ‘Engagement with the pensions industry on the development of a pension tracing service is ongoing’.
“While this is welcome, I believe the pace of progress on this issue has been far too slow. The only solution is a national pension tracing system, the cost of which should be shared between the pension industry and the Department of Social Protection. While trustees have a responsibility to ensure that entitlements are paid out, they are faced with a huge difficulty when they may not have had contact with an employee for decades. A dedicated pension tracing service, established on a statutory basis, would help former employees and pension fund trustees ensure that pension rights are paid out.
“It is my view that the pension industry also needs to look at the cost to employees of having an ever increasing number of small, scattered pension pots. Individuals should be facilitated to consolidate their pension savings to ensure they protected from high management charges and administration fees.”