ICTU's proposal on collecting the pensions contribution

NoRegretsCoyote

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The big difference is in how the contributions would be collected and managed.

I have to say that there is very little upside to having a range of providers chasing new entrants at high cost.

Also, economies of scale in having collection done by Revenue at source.


Government’s ProposalCongress’s Response
Operational model
- Workers will have access to a range of retirement saving products from approved pension providers via a newly established Central Processing Authority (CPA).
- Workers’ contributions will be deducted by employers directly from wages and transferred to the CPA. The CPA remit contributions to the pension provider.
Collect contributions in the same way as social insurance: the employer deducts the worker’s contributions at source, the employer and worker contributions are then collected by Revenue and all contributions noted on pay slip.
- Revenue to remit the contributions to a State fund.
Service providers
- CPA will tender every 5-10 years for 4 commercial providers for provision of pension saving products.
- Workers will be responsible for selecting one
of the 4 providers and a saving option.
- A maximum management fee of 0.5% p.a
One provider, a public fund e.g. the NTMA.
- The NTMA to contract out management and investment of proportions of the fund.
- The 0.5% maximum management fee is excessive.
 
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