Irish Life makes case to introduce auto-enrolment for pensions

Finance, Lifestyle | Tue 9 Jan | Author – Business & Finance
Jim Dowdall, Managing Director, Irish Life Health; Patrick Burke, Managing Director, Irish Life Investment Managers; Denis McLoughlin, Managing Director, Irish Life Retail; Tony Lawless, Managing Director, Irish Life Corporate Business and David Harney, Chief Executive, Irish Life Group.

Ireland’s leading life insurance and pension company state that drastic action needs to be taken to cater for the country’s ageing population.

Some of Irish Life‘s top figures commented on the need for reform and change:

The CEO of Irish Life Group, David Harney, said: “Our analysis shows that in terms of influencing both employers and employees to be more engaged with pensions, auto-enrolment is the best tool currently available to dramatically raise the levels of pension coverage and adequacy to where they need to be.

“We know from our own research and international experience that there are lots of factors to be considered when looking at auto-enrolment. As Ireland’s leading pension provider, we look forward to playing an active part in any future consultation process to help solve one of the biggest challenges facing Ireland’s ageing population.”

In Ireland, private pension coverage has fallen from 51% in 2009 to 47% in 2017. Currently, annual contributions are running at 11.4%, below the 13% to 14% deemed necessary to ensure comfortable retirement funding.

Research findings, presented by the Managing Director of Irish Life Retail, Denis McLoughlin, show that 35% of the population expect to rely on the State pension as their main source of retirement income.

He said: “While four in five people agree that as a nation we’re not saving enough for a decent quality of retirement, only one in four adults is planning towards a specific level of retirement income and, worryingly, it’s only one in three for the over 45s. Indeed, more than twice as many over 45s expect to rely on the State pension as their main source of retirement income compared to Millennials.” 

He went on to say: “A total of 84% of respondents believed that “automatic enrolment” is a better way to get more people saving for retirement. And in any future automatic scheme people say they’d like to have some control over their pension, with more than half (55%) wanting to be able to choose their pension fund manager, and only 13% wanting to rely on the government to choose the manager for them. 75% of people also said they’d be more likely to take out a pension or join a scheme if they had “emergency access” to some of their money, with the majority (62%) feeling that they should be able to use some of the value of their pension towards helping with a deposit for a mortgage.”

Managing Director of Irish Life Health Jim Dowdall said said that short-term thinking isn’t enough: “A key focus for the Irish health system needs to be on transforming our health model from ‘sickness management’ to one that focuses more on ‘prevention and well-being’.”

He also went on to say that Ireland was on course to becoming the “most obese” country in Western Europe by 2025, “While a majority of the population feel they are in good health, unfortunately the reality shows that the health of the population continues to deteriorate with 18% of adults now obese and we are set to become the most obese country in Europe within the coming decade. There is an urgent need to ensure our younger generation increase their levels of physical activity and adopt healthier behaviours, all of which will improve their health, reduce the level of chronic illness and the demands that this places on our health system.”