Morning business news - April 2Wednesday 02 April 2014 10.55
The pensions industry, both here and abroad, has come under strong criticism from a man who has several decades of experience in the sector. David Kingston, chairman of advisors Acuvest and a former chief executive of Irish Life addressed a conference on the pensions industry in Dublin this morning. He said the industry to date has been very technical and has lost touch with some of the major trends that have been occurring. "The industry is going through big changes at the moment. Defined benefit schemes are dying and are being replaced by defined contribution schemes. Let's not make the same mistakes again. If we're going to put a lot of money into pensions, let's manage them properly," Mr Kingston states.
Cited the doubling of life expectancy and the halving of long term interest rates over the past 50 years, Mr Kingston said these factors have had had a traumatic effect on the industry. "I think we've lost touch with managing the consequences of that and focusing too much on investment performance. There's no doubt that is important but we've been focusing too much on that second tier. We've been neglecting the top tier. We have to make sure the whole process is correct and we have an opportunity to do that now."
The pensions expert said the industry had been engaged in firefighting in the last few years, but he said that was a consequence of the industry trying to catch up with what should have been done 10 or 15 years ago. Mr Kingston said there was a case for the investor themselves to become more engaged in their pension's performance, but they shouldn't be expected to become the expert. "There've been many attempts to educate the consumer in financial matters. There's a limit to which that will go. You can't imagine that everyone is going to become a financial expert overnight."
MORNING BRIEFS - The Killybegs Fishermen's Organisation is to develop the world's biggest bio-marine ingredients facility in conjunction with a Norwegian science and technology company which specialises in the area. The €35m project will result in the creation of up to 70 jobs when it opens in 2016 and a further 50 jobs in the construction phase. The facility will have the capacity to process up 50,000 tonnes of raw material annually
*** Glaxo SmithKline has issued a product recall following a warning from the US Food and Drug Administration over contamination of a material at the company's Cork plant. The ingredient is understood to be paroxetine, which is used to make antidepressant drugs Paxil and Seroxat. GSK said there was no risk of harm to patients taking these drugs. In a letter seen by Reuters, the FDA said GSK did not fully investigate a list of conditions the regulator sent after it inspected the plant in October. Some batches of drugs using the contaminated ingredient were later shipped.
*** Australian industry took two big hits overnight. Oil giant BP says it is going to cease production at its Bulwer Island refinery in Brisbane by next year. And tobacco manufacturer Philip Morris is to cease cigarette production at its factory in Moorabbin near Melbourne. The company said the plain-packaging laws were a factor in its decision. But Australia's industrial sector has been hit hard of late by increasing Asian competition and a stronger Australian dollar.