Brexit My Life My Business My Pension

Transcription

1 Brexit My Life My Business My Pension

2 Kevin Coghlan Managing Director

3 Thank you to our Speakers

4 Three Core Services supported by Education, Seminars, Conferences Pensions Solutions: Using sophisticated solutions we help our clients to understand pension structures and how they can best use them to meet their objectives Investment Research and Advice We provide Global Economic Outlooks and research regulated investment funds across the globe allowing us to provide broad portfolio advice to our clients Self Managed Pensions We provide guidance to clients who wish to choose their own investments including shares, loan notes and property

5 TierOne We advise and decisions are made by our clients No discretion with funds Our Income model is transparent We don t take commissions from investment products We prefer platform services Easy online access to wide range of investments transparency Typical clients: SME owners/seniors/professionals with 20 years to retirement or less

6 Impact of Brexit Pension Investment Whether it s lower growth, lower interest rates for longer, QE to Fiscal the picture is not clear Barriers are a trend Wealth more likely to be generated by the sweat of your brow Safe income is impossible to obtain

7 Impact of Brexit Pension Investment Irish pensions can invest globally subject to local law and tax treatment Investing UK Think Property Common law No CGT, No Income tax. Will that continue? Currency risk ARF s receive less favourable treatment

8 Impact of Brexit Pensions Ireland UK Irish and UK Pensions similar until 1999 UK QROPS (Qualifying Recognised Overseas Pension Schemes) Revenue Practice allows transfers from Approved schemes to approved arrangements in other EU states Freedom of Goods and Services Revenue obliged to change transfer rules following threat of legal action by commission

9 The Bigger (Current) Picture Desperate need for mandatory pension contributions Main stream pension companies should be front runners Remember the National Pensions Reserve Fund? Remember the levy? Lack of political will Minister Varadkar looks like he has the appetite for reform

10 Pensions Debate not Real Unfunded pension of 66,000 at 65 = value circa 3.3m Cost of pension provision for 35 year old of 24,000 p.a. at 65 - an annual contribution of 15,750 Since 2008, the public service pension bill has risen by 75% Cost of Public Service pension 2015 = 2.8 billion.

11 The Bigger (Current) Picture Now Pensions are Headlines Public v private: A glaring inequality in pension provision Pensions Authority - Union leaders have warned that workers without pensions may not pay into a new staterun scheme due to fears their savings will be "squandered".

12 Important - Pensions Authority drive towards Master Trusts Argues that it will: Assist Simplification Reduce numbers of schemes Lead to economies of scale Reduce cost and increase coverage

13 Pensions unnecessary complications Personal Pension X X X PRSA X Company Plan Buy Out Bond

14 TierOne Submission Argues that it will: Assist Simplification Maybe but doubt it Reduce numbers of schemes Maybe but it will be cosmetic Lead to economies of scale Absolutely not drive pensions to international benefit consultants Reduce cost and increase coverage Absolutely not bland pensions = no engagement and hidden charges. Anti competitive

15 TierOne Submission Leave Single Member schemes alone Individuals can engage when they have control and transparency Self managed schemes enjoy high level of engagement Continue to allow property Rent = income Pension landlords make good landlords Critically allow companies to backfund pension Give self employed pensions fairer treatment

16 In 1970 SW The First Pillar Why all the Noise? Social Welfare Pension at 70 but Life Expectancy 72! In 2014 Social Welfare Pension at 66 but Life expectancy is mid 80 s? (Income needed for 20+ years?) Today there are 5 PRSI contributors for every pensioner By contributors for every pensioner Will benefits fall by 40% or amount of PRSI paid increase by 40%?

17 Payable Age Increasing Currently age 66 if born before 31/12/1954. Age 67 from January 2021 if born between 1/1/1955 and 31/12/1960. Age 68 from January 2028 if born on or after 1/1/1961. A reduction of 48k out of your lifetime income?

18 The Future UK a less certain investment destination Current benign regime will it remain so? Tell your kids Invest! Welcome mandatory pensions Likely knock on effect - Contributory SW Pension becomes means tested. likely to happen anyway Look at back funding Invest now. Invest wisely. Don t ignore it!

19 Regulatory Information This document is issued by TierOne Prudential Limited. It is for information purposes only and does not constitute an offer to enter into any contract/agreement nor a solicitation to buy or sell any investment or to provide any services referred to therein. This document is solely for the use of professional intermediaries and is not for general public distribution. The contents of this document are based upon sources of information believed to be reliable, however, save to the extent required by applicable law or regulations, no guarantee, warranty or representation (express or implied) is given as to its accuracy or completeness, and TierOne Prudential Limited or connected companies, directors, officers and employees do not accept any liability or responsibility in respect of the information or any recommendations expressed herein which, moreover, are subject to change without notice. This document has been produced based on TierOne Prudential Limited research and analysis and represents our house view. Unless otherwise stated all views are those of TierOne Prudential Limited. It may not be reproduced in any form without the express permission of TierOne Prudential Lmited and to the extent that it is passed on, care must be taken to ensure this is in the form which accurately reflects the information given here. Past performance should not be seen as an indication of future performance. The value of investments and the income from them can go down as well as up and an investor may not get back the amount invested and may be affected by fluctuations in markets and exchange rates. TierOne Prudential Limited is regulated by the Central Bank of Ireland.