Pensions History

Pensions History

The start of 2016 saw markets become extremely volatile and a General Election has passed with still no clear view of what Government will be formed.

As we continue into 2016, the IDA Ireland continue to do great work in attracting Foreign Direct Investment to Ireland. The role of an employee benefits package is becoming a key component in attracting the right talent, motivating staff and encouraging health & well-being to improve and enhance productivity and most importantly return on investment.

In 2016 Ireland, the biggest investment most organisations have is in their people and how best can you receive a positive return on investment and what is the link with that employee benefits program.

Typical employee benefits in Ireland today range from: Pension, Protection, Health Insurance, Dental & Vision cover.

However 1916 tells a different story for a general employee. Low economic growth had meant that there was a large pool of unemployed casual labour which employers could and did exploit quite ruthlessly.

Did you know?

Legislation was introduced through The Army & Military Service Pensions Acts, commencing in 1924 and continuing in 1934 and 1949, to recognise the service of veterans from Easter Week 1916 through to the 30th September 1923, who were proven to have had active service during the week commencing 23 April 1916, and in the War of Independence and the Civil War, through the payment of service pensions.

The week commencing the 23 April 1916 had a weighted factor of 5 years while the main year of the War of Independence was weighted as 2 year.

You see the actuaries even had their place back in 1916!

Today we face a new set of challenges when it comes to pensions:

Pensions & Retirement planning are a constant concern with the potential that the State Pension may not be around when people in the 20’s or 30’s actually retire. Pensions really are a long term savings fund and there is a need for an industry wide communication and education around the importance of saving over the long term.

A recent survey by Standard Life showed that 75% of respondents don’t know that the State tops up pension contributions by up to 40% for higher rate tax payers and 20% for lower rate tax payers.

Perhaps some element of drawdown or access to a portion of the fund during the 40+ years of saving might attract younger people in to the habit of savings.