pensions & ADVICE
What to do differently in 2017? Susan O’Mara takes time to look ahead to 2017 in this issue. As usual her advice cuts straight to the point!
If you are midway through your working life you ought to know how much you need to have saved or have yet to save for your retirement.
Get Your Finances–and body—in shape – one study showed that more exercise leads to higher pay because you tend to be more productive after you’ve worked up a sweat.
Habits and discipline
“So taking up running may help amp up your financial game. Plus, all the habits and discipline associated with, say, running marathons, are also associated with managing your money well.” I couldn’t find the corresponding “one” study; however, if it turns out that by the end of 2017 you aren’t better off financially, at least you will be fitter!
Nothing to lose!
What will YOUR retirement cost?
60 CONSTRUCTION November/December 2016
On a more serious note however, in looking back over 2016, the majority of clients I met throughout the year (both young and older) hadn’t ever really crunched the numbers on the cost of their own retirement. And with this in mind, this is my only tip for 2017: If you do nothing else with your personal finances in 2017, do try to consider the actual cost of your own retirement. The internet is very useful for this; if your own pension provider doesn’t already have a pension calculator then there are many online. The Pension Authority has one, as do my colleagues in CERS – which is on their website (www.cers.ie). But most people I spoke to didn’t visit them. If you are mid-way through your working life you ought to know how much you need to have saved or have yet to save for your retirement. If you are still in the beginning phase, understanding that starting earlier will take the pressure off down the road will help you and be a helpful motivator. You can see from the table below the value of saving a monthly amount of €100 will accumulate a much greater fund at age 65 if you start at age 25 compared to starting at age 35 – that is €34,000 to be precise. The monthly premium over the same period (25 – 35) is only €12,000 more over the same 10 years – which means that starting at age 25, instead of waiting until age 35, has a net gain of €22,000. This is due to the 10 years more of extra investment growth*. Age at Commencement Accumulated Fund 25 €93,000.00 30 €75,000.00 35 €59,000.00 40 €45,000.00 45 €33,000.00 50 €23,000.00 55 €14,000.00 60 €6,000.00 *for the purposes of this estimate is 3.09% per annum
Construction Pension Scheme News
The CIF Pension Administration Service (CPAS) administers both the Construction Workers Pension Scheme (CWPS) and Construction Executive Retirement Savings (CERS), and with retirement assets of over €2bn in 2016 is listed as the fifth largest Occupational Pension Scheme provider in Ireland. The 2015 CWPS Trustee Annual Report was published in September 2016 and is available to all members. CWPS celebrated its fiftieth anniversary in 2015 and the latest report from the scheme shows that the assets under management for the year ending December 2015 have risen to €1.395bn. Active membership of CWPS has increased to over 20,000 construction workers in recent months, up from 18,532 at the end of 2015. The CERS Trustee Annual Report will be available early in 2017. Assets under management for the year ending 31 May 2016 were €495.57m. CERS has also seen an increase in membership numbers from members of the construction sector seeking a more bespoke and flexible retirement savings arrangement. These increases in membership reflect the increased activity in the construction sector along with a concerted business development drive by CPAS. In a recent survey compiled by a trade publication the TOP 20 performers in Irish Main Contracting were listed. It is interesting to note that of the 20 Main Contractors who were listed in this survey, 100% use CWPS to provide Pension, Death in Service and Sick Pay benefits for their construction workers. In the same survey, the TOP 20 Irish Service SubContractors were listed and of these 95% use the services of CWPS to provide benefits for their construction workers. In the June issue of Construction Magazine listing the Top 50 CIF contractors, 20 of these contractors use CERS to provide their pension benefits to members. CERS provides bespoke pension arrangements to executives and staff in the sector.
If you have been diligently contributing to a pension scheme all along, use the pension calculator to estimate the value of your current fund as retirement income. What income are you on track for? How does it measure up against your current lifestyle and retirement goals? If there is a gap, the sooner you know, the sooner you can remedy it. Overall for 2017, the important thing to know is how much you’ve saved and how much you still need to. So, go on. Dig out that benefit statement from your pension provider and crunch the numbers! C
Published on Dec 12, 2016