Irish Wealth / net worth distribution

ryaner said:
Are they really owned by the employee? With all the rules around them they operate very much on a promise that you'll still be able to access them when the time comes, just like the promise the a DB will pay you when the time comes.
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Yes, they are the property of the employee. The fund is made up of the employee’s own contributions, which may or may not be supplemented by the employer.

The fact that funds in which the pension pot is invested might not perform well does not affect ownership.

Ownership of defined benefit schemes crystallize only when the benefit is paid.
 
Sophrosyne said:
Yes, they are the property of the employee. The fund is made up of the employee’s own contributions, which may or may not be supplemented by the employer.

The fact that funds in which the pension pot is invested might not perform well does not affect ownership.

Ownership of defined benefit schemes crystallize only when the benefit is paid.
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Technically DC Plan's funds are not the property of the employee though that doesn't mean they shouldn't be included as wealth...

I normally agree with Gordon on nearly everything but completely disagree that DB PLans should not be considered as part of someones assets or wealth....certainly for non public sector pensions who have not yet retired....now we might have a long discussion about what value you put on it but given you take a transfer value up to the point of retirement it would seem that would be a good starting point i.e. there is no difference once you take the transfer value with a DC pension so why would you argue different treatment?
 
Life_pondering said:
Technically DC Plan's funds are not the property of the employee though that doesn't mean they shouldn't be included as wealth...

I normally agree with Gordon on nearly everything but completely disagree that DB PLans should not be considered as part of someones assets or wealth....certainly for non public sector pensions who have not yet retired....now we might have a long discussion about what value you put on it but given you take a transfer value up to the point of retirement it would seem that would be a good starting point i.e. there is no difference once you take the transfer value with a DC pension so why would you argue different treatment?
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You can’t take a transfer value unilaterally.

It has to be made available.

A transfer value is like an offer to buy you out of the company’s obligation.
 
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But you have a statutory right to take a transfer value with certain exceptions - as above, where it gets interesting is around the value but in most cases, the minimum transfer value is a reasonable proxy (until it's not!).

I certainly consider the value of my wife's DB pension entitlement as part of our wealth
 
Life_pondering said:
But you have a statutory right to take a transfer value with certain exceptions - as above, where it gets interesting is around the value but in most cases, the minimum transfer value is a reasonable proxy (until it's not!).

I certainly consider the value of my wife's DB pension entitlement as part of our wealth
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Is it not just statutory for two years after you leave the job or similar?
 
Gordon Gekko said:
But a DB is just a promise.
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A promise that will only go unfulfilled in a tiny number of extreme circumstances. Kinda like how your investment property might no longer be an asset if you forget to insure it and it burns down, or your investment in Zurich might go to €0 if they went bankrupt etc.

I get that it might be difficult to calculate the value of DBs, but to me it would be 100% valid to include them and discussing how many millionaires their are in Ireland (or any similar tabloid headlines we hope to cover next :) ) is totally inaccurate if they’re not included.
 
I would go so far as including a state contributory pension entitlement as wealth.

Sure there is estimation and uncertainty involved, but someone with one is surely better off than someone without.
 
Well, if you accept that control over a fund is irrelevant, then yes, include the capital value of all State pension and benefit entitlements as assets for wealth assessment purposes.

Everyone’s out of step except Ireland!
 
Is the data broken down by age profile? As this can skewed by age.

For example you could have a 30 yr old earning 150k just taken out a 30yr mortgage of 450k will have a minus net wealth Vs a 60 yr old who is earning 60k but paid of their mortgage.

Theoretically you'd expect everyone's debt burden to decrease each year as mortgages are typical the biggest liability.
 
How would a 30 yr old with a mortgage of 450k have negative net wealth?

He will have an asset of at least 450k to set against the liability of 450k - unless he paid more for the property than the mortgage
 
jpd said:
How would a 30 yr old with a mortgage of 450k have negative net wealth?

He will have an asset of at least 450k to set against the liability of 450k - unless he paid more for the property than the mortgage
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Ahh, I've misinterpreted the formula. I thought it just took the mortgage as a liability and didn't include the property as an asset.

Makes me feel better about it now!
 
Dublinbay12 said:
Is the data broken down by age profile? As this can skewed by age.

For example you could have a 30 yr old earning 150k just taken out a 30yr mortgage of 450k will have a minus net wealth Vs a 60 yr old who is earning 60k but paid of their mortgage.

Theoretically you'd expect everyone's debt burden to decrease each year as mortgages are typical the biggest liability.
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In real term the 60 year old will have a better standard of living and a higher disposable income so it's fair to say that he's wealthier no matter what way you look at it (unless your a Shinner or the Loony Left).
 
Silversurfer said:
Am I correct in that translates to 44% of households? Presuming there is no overlap?
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There is overlap - according to this section it's 36%: https://www.cso.ie/en/releasesandpu...generationaltransferofwealth2020/keyfindings/

"More than a third (36%) of Irish households have received at least one inheritance or substantial gift at some point, with 30% having received an inheritance and 9% having received a gift. The median or mid-point value of these intergenerational wealth transfers was €80,200 among recipient households."

This part is very interesting:

"More than two-thirds (63%) of the wealthiest 20% of households (top quintile) in Ireland received at least one intergenerational transfer, compared with 16% in the least wealthy 20% of households (bottom quintile). For households in the top quintile who received an inheritance or gift the median value was €189,700, while the median value of recipients in the bottom quintile was €6,700."

So if you are wealthy you are 4x as likely to receive a transfer and it will be 28x higher than the poorest households.

And homeowners compared to renters:

"Homeowners were more than twice as likely as renters to have received an intergenerational transfer (44% compared with 18%). The value of transfers was also greater for owner-occupiers compared with renters, with median values of €98,300 and €15,200 respectively."
 
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