More than €500 million in pension benefits remain unclaimed in Ireland as people have lost track of pensions they put money into in previous jobs.
Part of the problem, according to James Dorrian from the National Pensions Helpline, is that there is “no single platform or infrastructure in place in Ireland allowing deferred scheme members to access information on their pension savings and to trace their pension entitlements”.
“Lost” pension benefits could be as high as €1 billion, given the remarkable rally in global stock markets over the past five years, some industry analysts suggest.
Moreover, the problem is only likely to get worse in an era where people are more likely than previously to move jobs, even leaving the country for employment before possibly returning at a later date.
Mr Dorrian, a qualified financial adviser, said it is worth taking some time to check if you have any pensions from places, you may have worked in, down the years.
Failure to do so, he said could come at a price. “Research indicates that individuals who do not consolidate their pensions can lose out on thousands of euros in investment losses and unclaimed benefits,” he said. “Because your ‘lost’ pension is likely not being actively managed, the risk profile of your investment may not match up to your current life stage. This is particularly true for old forgotten pensions.”
‘With airlines there’s always some volatility'
Mr Dorrian said the first thing to do is to collect the essential personal details that any pension provider will require to track down any forgotten benefit. These include your Personal Public Service (PPS) number, any old addresses and details of the companies at which you worked.
“Having accurate and complete information readily available can significantly speed up the process of tracing your pensions,” he said. “If you have previously worked in another country, such as the UK, you will need your UK national insurance number. Each of the EU countries will have its equivalent of the PPS or national insurance number so, depending on where you have worked, try and track this down.”
He advises people to then contact former employers in a search for the details of the pension provider managing their occupational scheme and their policy number which is information he said all employers generally keep.
Addressing the issue some years ago in the Oireachtas, then minister for finance Paschal Donohoe said trustees are required to ensure that proper membership and financial records are kept. Members of pension schemes should also receive annual statements from any pension schemes into which they have paid though this can fall where people move addresses without informing pension providers.
Once you have tracked down any forgotten pension pots, you can consider whether it is better to leave them where they are or consolidate them into a single plan over which you might have more direct control.
The options for people who leave a job depend on how long they were employed there and the nature of the pension. In the case of those who join an occupational pensions scheme offered by the employer, they will generally only get back the money they have contributed if they leave the job within two years.
After that, however, the pension savings are locked in.
That leaves departing employees with three options. They can leave the money where it is. Although no further contributions will be made on their behalf by their former employer, the money will remain invested and accessible to them when they retire or earlier in line with the rules of the scheme.
Otherwise, they can transfer their accrued benefit to an occupational scheme offered by their new employer. Or they can transfer it into what is called a buyout bond, which is a policy in their name over which they have more direct investment control.
- Sign up for Business push alerts and have the best news, analysis and comment delivered directly to your phone
- Join The Irish Times on WhatsApp and stay up to date
- Our Inside Business podcast is published weekly – Find the latest episode here
