Mercer Ireland conducted a recent survey on retirement benefits from company paid pension schemes. The survey showed that in 2000, more than 90% of retirements were from Defined Benefit [DB] pension schemes. DB schemes are those where pension benefits are guaranteed by the employer. The average age of retirees was 60.

In 2017, only 50% of those retiring had a defined benefit pension scheme. The remainder were in Defined Contribution [DC] schemes. In DC schemes, pension benefits at retirement age are based on the value of the pension fund. The average retirement age has crept up to 62.

It is possible that the fall in the number of DB schemes is linked to the rise in age of taking benefits. DC scheme retirees may be delaying taking retirement benefits to get a higher fund value and higher retirement benefits.

The Government recently produced its road map for the future of pension saving in Ireland 2018 -2023. It identified the problem of too many private sector employees with insufficient pension savings. The current State Pension system and the Public Sector pension were designed in times when people lived shorter lives and dependents were a smaller proportion of the working population. Both systems are unsustainable in a future where people are living longer and the dependency ratio is increasing sharply.

The Pensions Road map is strong on how retirement savings will be accumulated. There are no answers about what happens when people reach retirement age. The role of advice in the entire process has been completely ignored – presumably, people will have to fend for themselves?

The one constant theme however is the gradual and inexorable reduction in the role and responsibility of employers in the retirement savings process. DB schemes, except in the public sector, where employers have to guarantee retirement benefits are becoming as rare as hens teeth. The investment risk has instead been pushed on to the employees via DC schemes.

Master trusts will remove the last vestige of responsibility an employer has to his employees in respect of pension saving.