Micheál Carrigy
Question:70. Deputy Micheál Carrigy asked the Minister for Social Protection for a full breakdown of charges that pension providers are charging; and if he will make a statement on the matter. [10855/26]
View answerThursday, 26 February 2026
Questions (70)
Written answers
At the outset, it should be noted that my Department has no role or function regarding the regulation of financial service providers, including life companies, brokers and intermediaries, which are regulated by the Central Bank of Ireland and come under the policy remit of the Department of Finance.
In the context of occupational pension schemes, the Pensions Act 1990 does not contain provisions in relation to the application, or level, of charges, costs or fees incurred by schemes or scheme members. My Department does not receive or retain data which sets out a full breakdown of charges applied by pension providers. Pensions charges can arise throughout the pension saving cycle (from initial set-up, accumulation phase and decumulation phase). Pensions charges can relate to, amongst other things, investment management charges, policy fees (usually a monthly or annual fee levied to cover administration costs), professional trustee fees, audit fees, actuarial fees, key function holder fees, custodian fees, broker fees/commissions, legal fees, professional/consultancy advice costs, member communication/support costs, exit penalties. While many of these charges may be borne by sponsoring employers, they may be indirectly borne by the scheme members through the pension charging structure of schemes.
The availability of comprehensive and transparent information on fees and charges is important and helps consumers to decide whether investments represent value for money. It is recognised that improved transparency in relation to fees and better outcomes for pension savers is always desirable.
Pension scheme trustees have responsibility for achieving good outcomes for the members and beneficiaries of their scheme. Scheme costs have an important bearing on these outcomes, and therefore trustees should know the costs that their pension scheme is incurring and be able to justify the value received for these costs.
In the context of Personal Retirement Savings Accounts (‘PRSAs’),
• Standard PRSAs have predetermined charging structures under section 104 of the Pensions Act, with total charges capped in two ways. A 5% cap on each contribution and a maximum of 1% per year on the fund value. This charging structure reflects the fact that standard-PRSAs may only invest in pooled funds.
• Non-Standard PRSA contracts are, in the main, not invested in a default investment strategy and, therefore, they are not subject to the limitations that apply to standard PRSAs as they can invest outside of pooled funds and investments do not need to be appropriately diversified. The investment choice available under a Non-Standard PRSA requires active management of the fund and the level of risk and charges associated can depend on the type of investment strategy chosen. Consequently, there is no cap on charges applied to Non-Standard PRSAs.
There are requirements imposed on scheme trustees in relation to the disclosure of information to scheme members in relation to charges as set out in –
• the Occupational Pension Scheme (Disclosure of Information) Regulations 2006 [S.I. No. 301 of 2006] made under the Pensions Act 1990, and
• Regulations 31 to 37 of S.I. No. 128 of 2021 which requires trustees to provide members (active and deferred) with an annual Pension Benefit Statement (PBS) including information in respect of pension projections and costs incurred by the scheme.
In relation to PRSAs, under sections 111 and 112 of the Pensions Act and the Personal Retirement Savings Accounts (Disclosure) Regulations 2002, providers are required to provide –
• in advance of a PRSA contract being entered into, a preliminary disclosure certificate. This certificate outlines projected benefits, investment strategies and potential charges relating to the specific PRSA product,
• on an annual basis, a statement of reasonable projection predicting the likely future value of a PRSA. This statement is based on assumptions relating to future contributions and investment returns, and the cost of buying an annuity when a member retires.
Failure to comply with the provisions of the Pensions Act, and regulations made thereunder, outlined above is an offence under the Act.
In the context of MyFutureFund, the new automatic enrolment system, the charges that are applied to participants consist of an administration fee charged on contributions and an investment management fee based on a percentage charge on assets under management. The administration fee takes the form of a flat weekly fee of 55 cents on contributions rather than a 'commission' based on a percentage of funds under management. In this way the administration fee will reflect the actual costs of administration (which do not vary with fund size), will be same for all participants regardless of their income or the size of their retirement fund, and will, ultimately, prove much better value for money for the participant over the course of a standard retirement planning horizon. The administration fee will not be levied in the case of suspended, paused or otherwise dormant accounts. With regard to the fee for the investment management services, it will average at just under 0.04% of assets under management (AUM).
Finally, other pension products such as Approved Retirement Funds and Retirement Annuity Contracts are not provided for, or regulated under, the Pensions Act 1990 for which my Department has policy responsibility as such products fall within the policy remit of the Department of Finance.
I trust this clarifies the matter for the Deputy.