Rip Off Pension Charges
In the early 90s when life and pension products had all the translucency of mass concrete, when consumers had zero rights to lift the veil on charges and who was getting what, I took action under Competition law against the Irish Insurance Federation who operated a self regulatory cartel that had the full backing of a captive Government. The result, after a decade long battle was the implementation in 2001 of consumer rights to disclosure at point of sale. The most vile and excessive rip off products were taken off the shelves but their legacy remains for those who unwittingly contribute to schemes they took out in the 80s and 90s.

These are the kind that legally allow the pension industry to conceal the effect of swiping up to 60% of the first years contributions and all fresh increases upon it to retirement age. The rip off is hidden by using a highly controversial book keeping system that reports false values each year. It remains a very ugly business when a simple ban would have done it in.

Are there still excessive costs in parts of the pensions industry? You betcha. Wherever there is poor information access and restricted competition there is a rip off. But fee based advice, low cost products and fierce competition abound so there's lots of choice too. The real problem with modern products is the unfair disadvantage many consumers are at because of product complexity and lack of fluency in personal finance, hardly surprising given the deficit in the education system.

Biggest Pension Scheme is a Ponzi
But that's not the big issue of our time. If a cash strapped employer owes a million Euro in pension promises but has only fifty grand in assets, the scheme is patently insolvent and must be wound up. Nearly one Euro in ten of all our taxes will pay pensions this year to retired public servants. We already owe €116,000,000,0000 in promises to about a fifth of the workforce that's €116 billion and rising. The assets backing those promises are gone. By any sane measure it is a ponzi scheme but while the Government enforce the rules on insolvent pension schemes to protect workers, it continues treat public sector workers like mushrooms.

This week in what can only be described as some of the best examples of the dark arts of deflection and propaganda the Taoiseach Enda Kenny and Minister Joan Burton are busily striding into the debate on pension charges. This is a political campaign designed to combat their decision to rob private pensions of 2.4% of their capital.

But the big question is how can the Government continue with a patently insolvent public sector pension scheme? When are members going to be told the truth that these pensions are a classic ponzi scheme illusion? Where is the blue print to address the most basic truth - that the Irish pension model both private and public is broken? That's what Enda and Joan should be talking about but that means facing up to the fact that their own pensions , the most cherished asset of the mature big beasts in politics and the civil service, is a trick of the light.