Pensions made simple? Well, perhaps made more understandable is a better way to describe Ark Life's useful new guide. There is nothing particularly simple about today's pension contracts, but this latest booklet certainly goes some way towards explaining and illustrating the issues involved and in trying to answer the most common questions and difficulties ordinary people have about them. There are sections on how pension funds are invested, regulations governing pensions, and special considerations that women should make for their retirement.
What is particularly useful about this guide are the tables and charts that illustrate each section: a simple table about pension plan eligibility, in which the four types of plans are blocked off and then highlighted depending on employment status, should probably be adopted industry-wide by brokers and direct sales staff in order to avoid misleading pension buyers, an issue highlighted in this column last week.
Other tables of particular relevance are the ones that show how efficient pension funds are because of their favourable tax status and the amount of salary or income that needs to be invested in a pension fund to provide a retirement income that is the equivalent of two thirds salary at retirement. The booklet also includes a question and answer section which covers the most common questions people have about pensions. Because Ark Life, like Lifetime Assurance employs its own sales staff and relies on the AIB branch network for referrals, (it does not pay commission and therefore tends not to deal with brokers), a guide like this is essential reading for any AIB Bank customer who is considering buying an Ark pension. By dealing with a bank assurer directly (or for that matter, any insurance company directly ) you forfeit any semblance of independent advice. But even a well-presented guide like this has its limitations: it does not mention the costs and charges involved in the purchase of an Ark pension; it does not warn about any penalties or disadvantages that may occur if you are unable to continue making regular contributions.
While these features would hopefully be mentioned during the sales process, the guide makes no mention of the company's own fund performance since its inception 10 years ago (mediocre to average) and is unlikely to do so even during a face-to-face meeting with an Ark Life official.
Pensions Made Simple is available from all AIB branch offices.
