Plan sponsors often have competing priorities when it comes to overseeing the pension plan and meeting their company’s strategic objectives. In Ireland, 67% of plan sponsors surveyed were willing to delegate the selection of specific funds to include/exclude from the default, which could reflect their desire to focus day-to-day work on other matters.
While most respondents globally said that “doing the right thing for my retirement plan’s members/employees” was most important, Ireland and the UK bucked the trend by placing “recruiting and retaining talent” of greater importance. It seems that to Irish employers, the pension scheme is used as a tool to promote working for the company, and meeting retirement objectives comes second.
Room for Improvement
Among Irish plan sponsors, 80% indicated that their members will be able to stop working at retirement age. But they are far less confident about members being able to live as they currently do. Members themselves appear far less sure of what their own retirements will look like.
The increased optimism that plan sponsors displayed could partly be explained by some employers still enforcing compulsory retirement ages. It may be that many members are retiring on the date planned, at the cost of adequacy in retirement. Policymakers should consider measures to support phased retirements and flexibility in order to allow members to accumulate assets for longer.
A Helping Hand
We asked respondents to rank who is most responsible for ensuring that members have an adequate income in retirement. With the exception of the Netherlands, who placed responsibility firstly at the employer’s feet, the consensus is that responsibility lies with the member. In Ireland many plan sponsors believe the employer is equally responsible: