Former pensions ombudsman strongly supports Colm Fagan's proposal

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Duke of Marmalade

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Irish Mail on Sunday
 
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Why would the government go against picking a scheme that benefits pensioners more?
 
Much of it comes down to siloed thinking.

The sensible approach would be for Revenue to collect via payroll and NTMA to manage the funds. These are core tasks of each body.

Instead the Department of Social Protection (DSP) is in charge of the policy and also the collection and management of contributions . DSP are experts at paying funds, not collecting or managing them. The latter two tasks will be the vast bulk of the work for several decades.

DSP also has a more socialist mindset and does not like the concept of tax reliefs as it considers them too beneficial to those on higher incomes.

I suspect this debate has been had at senior level (possibly ministerial) with DSP having won out.

All of the above is educated guesswork - no journalist seems to have even scratched the surface on this.
 
Dr Strangelove said:
Much of it comes down to siloed thinking.

The sensible approach would be for Revenue to collect via payroll and NTMA to manage the funds. These are core tasks of each body.

Instead the Department of Social Protection (DSP) is in charge of the policy and also the collection and management of contributions . DSP are experts at paying funds, not collecting or managing them. The latter two tasks will be the vast bulk of the work for several decades.

DSP also has a more socialist mindset and does not like the concept of tax reliefs as it considers them too beneficial to those on higher incomes.

I suspect this debate has been had at senior level (possibly ministerial) with DSP having won out.

All of the above is educated guesswork - no journalist seems to have even scratched the surface on this.
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Would there also be a fear of the unknown and the lack of precedent that is mentioned in the article? Its always safest for the Civil Service individual to say no especially on large decisions. A poor decision backed up by any precedent may have outweighed the better option?
 
Dr Strangelove said:
Much of it comes down to siloed thinking.

The sensible approach would be for Revenue to collect via payroll and NTMA to manage the funds. These are core tasks of each body.

Instead the Department of Social Protection (DSP) is in charge of the policy and also the collection and management of contributions . DSP are experts at paying funds, not collecting or managing them. The latter two tasks will be the vast bulk of the work for several decades.

DSP also has a more socialist mindset and does not like the concept of tax reliefs as it considers them too beneficial to those on higher incomes.

I suspect this debate has been had at senior level (possibly ministerial) with DSP having won out.

All of the above is educated guesswork - no journalist seems to have even scratched the surface on this.
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I suspect you're right. It would also explain why the DSP tried to solve multiple issues with pensions, such as how the tax relief works. Doing all of this at once has led to the situation where there are now parallel incentive systems, and you would have to question whether that result really serves the state and its citizens well.
 
Fortune said:
But then to try and cheap out on it somewhere
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You're absolutely right. A good example is what's being proposed in relation to risk reduction as age increases. The UK's NEST has different unit-linked funds for each maturity age. That means around 50 maturity age funds for those choosing the default option. The Bill has just three risk levels for those choosing the default option, but that creates precipices at ages 51 and 61. If you're unlucky and the market drops sharply just after you reach either of those ages, you're in the manure business. Has the DSP thought through the consequences?
 
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@Colm Fagan your alternative approach was discussed yesterday in the Seanad courtesy of Michael McDowell, who also referenced Mr Kenny's endorsement of it.


Most of the debate is in the 17:06 link, McDowell speaks approx 45mins into that particular recording.

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Redzer said:
Would there also be a fear of the unknown and the lack of precedent that is mentioned in the article? Its always safest for the Civil Service individual to say no especially on large decisions. A poor decision backed up by any precedent may have outweighed the better option?
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This comment brings me back to my early years in the IT industry.

We needed a solution to a particular problem and the engineers were assessing the two final external vendor products.

The engineering team suggested that the product by a small, less known, external vendor was the better solution for our problem and was also significantly cheaper.

The ultimate decision, however, belonged to management. They went against the engineers suggestion and one comment at the meeting has stuck with me over the years - "no one is ever going to get sacked for choosing IBM".

Chances are many of those shooting down the proposed solution actually do think it's better but aren't admitting it publicly; instead playing it safe knowing they can't really get into trouble for copying what many larger countries are doing.
 
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