Charlie West, Personal Finance Editor at The Independent, in Great Britain, writes that the average size of a self-administered pension scheme—the type favored by highly compensated executive and other high net worth workers—isn’t as grand as you might think.
Citing research by Irish pension trustees conducted by Milliman, he points out that the average fund totals around €430K (about US$521K as of this writing). That would throw off about €14.3K annually, around US$17.3K. Hardly enough to fatten the cat.
The Milliman research put paid to claims that average funds run into the millions and will no doubt influence discussions going forward about pension policies in Ireland and Great Britain.
The Independent looks at public misperception over proposed mandatory state pensions:
ALMOST half of people surveyed about the Government’s plans to introduce a new mandatory pension mistakenly believe it will be as good — if not better — than a public sector pension.
However, the reality is that people who take out the new self-enrolment pension will be three times worse off.
The research commissioned by investment company Standard Life indicates that confusion reigns about pensions.
Nearly one million people have no pension plan in place other than the State “social welfare” pension.
But large numbers of people think that Government proposals to introduce a new mandatory pension for those who do not have one will mean they will enjoy a pension as good as those available in the public sector.
This is despite the fact that for those who join the new auto-enrolment pension just 8pc of their salary will be invested to build up a retirement fund.
This will be made up of 4pc to be paid by the employer, 2pc to be paid by the State and 2pc paid by the employee. In contrast, the equivalent of 23pc of salary would need to be put aside for a public servant’s pension, Standard Life said.
This is in line with findings from actuaries Milliman (formerly Life Strategies) for the 2007 public sector benchmarking report.
The Independent includes an article on recent growth in the Irish life insurance and pension area:
IRELAND‘s life and pensions industry has returned to growth after more than two years of steep decline.
Draft figures circulated to insurance companies show new business sales for life and pensions grew by 4pc in the first quarter of the year.
The growth follows a collapse of close to 30pc in 2008 and 2009 as the industry reeled from brutal investment markets at the economic collapse.
The latest data was compiled by actuarial consultancy Milliman, formerly known as Life Strategies.
The 4pc rise is based on the industry benchmark Annual Premium Equivalent which includes all the regular premium business for a year, plus 10pc of the single premium business