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."
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