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The Irish employers’ group has published a new report which claims allowing individuals to access AVC s could result in an immediate Exchequer windfall of €600m, rising to €1.24bn as a result of additional spending in the Irish economy. The group, which says such a move would provide a domestic economic stimulus worth €1.8bn, has called on government to follow the example set by Denmark and Iceland to change pension rules to facilitate the draw-down. IBEC chief economist Fergal O'Brien told PLANSPONSOR Europe: “Advisers are going to have full access and details of how the main occupational scheme is performing and whether that scheme is going to be in deficit. “They will know whether there are problems with the defined benefit scheme and whether defined contributions haven’t been sufficient and if members actually need these additional contributions “This is exactly the type of advice that employers are facilitating at the moment where advisers are looking at the adequacy of the main occupational scheme.” Jerry Moriarty, director of policy, at the Irish Association of Pension Funds (IAPF) said he saw some merit in IBEC’s proposals as limiting such measures to AVCs does has the benefit of not undermining basic retirement provision. But he warned some issues would need to be thought through carefully such as whether access should be limited and whether there would be pressure from creditors to force access. He added: “While boosting the economy could be one objective it would also be attractive to people who have immediate debts. The need to take independent financial advice would be important.”
The Irish employers’ group has published a new report which claims allowing individuals to access AVC s could result in an immediate Exchequer windfall of €600m, rising to €1.24bn as a result of additional spending in the Irish economy.
The group, which says such a move would provide a domestic economic stimulus worth €1.8bn, has called on government to follow the example set by Denmark and Iceland to change pension rules to facilitate the draw-down. IBEC chief economist Fergal O'Brien told PLANSPONSOR Europe: “Advisers are going to have full access and details of how the main occupational scheme is performing and whether that scheme is going to be in deficit.
“They will know whether there are problems with the defined benefit scheme and whether defined contributions haven’t been sufficient and if members actually need these additional contributions
“This is exactly the type of advice that employers are facilitating at the moment where advisers are looking at the adequacy of the main occupational scheme.”
Jerry Moriarty, director of policy, at the Irish Association of Pension Funds (IAPF) said he saw some merit in IBEC’s proposals as limiting such measures to AVCs does has the benefit of not undermining basic retirement provision.
But he warned some issues would need to be thought through carefully such as whether access should be limited and whether there would be pressure from creditors to force access.
He added: “While boosting the economy could be one objective it would also be attractive to people who have immediate debts. The need to take independent financial advice would be important.”
Graham Simonseditors@plansponsoreurope.com