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for Irish Occupational Pension Schemes
Amount of pension depends on salary and service
Amount of pension depends on amount saved while working
and/or
and/or
predominantlyin regulated markets
Asset Class | Capital Value | Return Type | Long Term Returns |
---|---|---|---|
Equities | Very Volatile | Real returns | High |
Bonds | Somewhat Volatile | Nominal returns | Moderate |
Property | Moderately Volatile | Real returns | High |
Cash | Stable | Nominal returns | Poor |
Set investment objectives
Decide on investment structure
Monitor performance
Select investment managers
Potential for great returns,
but an unacceptable level of risk!
Risk | When | Suitable Investment |
---|---|---|
Inflation Risk | Long time to go to retirement or planning to invest in ARF | Equities / Property |
Market Risk | Close to retirement (funding for lump sum) | Cash |
Interest Rate Risk | Close to retirement (funding for pension) | Long bonds |
IF:
THEN:
Two members, same scheme, identical saving histories1 retire a year apart. Assume both take the same tax-free cash lump sum of €75,000. The remainder is used to buy an annuity(per annum)2 of:
Jim retires | Difference | Paul retires | |
---|---|---|---|
1-10-2007 | 1 year | 1-10-2008 | |
Consensus | €8,900 | €3,600 | €5,300 |
Lifestyle | €6,760 | €80 | €6,840 |
Defined benefit:
Liabilities | €m | Assets | €m |
---|---|---|---|
Actives | 12.3 | Investments | 11.6 |
Pensioners | 1.6 |
Balancing Item
(e.g. deficit/future contributions) |
9.9 |
Deferreds | 7.4 | ||
Creditors | 0.2 | ||
Total | 21.5 | Total | 21.5 |
Member entitled to immediate vested rights, after 2 years in the plan
The annual reports should include the identities of:
Audited accounts must include:
Within 2 months of joining scheme, member to be furnished with booklet, to include:
For DC Schemes trustees must also furnish members with the following:
In broad terms, the main duties of the Trustees under the Act are:
Trustees must