Vol. 454 No. 3
30 Mr. J. Walsh asked the Minister for Social Welfare the proposals, if any, he has to deal with the growing social welfare pensions bill in view of our greying population and in view of the forecast that the total social welfare pensions bill will increase from £1.2 billion in 1990 to approximately double that figure by 2036; and if he will make a statement on the matter. [10649/95]
40 Mr. Sargent asked the Minister for Social Welfare the steps, if any, he has taken to effect a long term restructuring of the State pension provision taking into account the growing burden of providing for contributory pensions out of the PRSI fund and in view of projections that PRSI pension costs to the State will be doubled by the year 2035. [10643/95]
I propose to take Questions Nos. 30 and 40 together.
On a number of occasions recently I have drawn attention to the demographic patterns which indicate a considerable increase in the proportion of elderly people in the population over the first half of the next century. This will have a significant impact on the future costs of social welfare pensions, which, as the Deputies point out, are set to increase by some 100 per cent by the year 2035. At the same time the ratio of persons in the economically active age group to those over age 65 is projected to fall. This would result, in the absence of any change, in an increasing burden of the cost of pensions falling on future generations of PRSI contributors and taxpayers. These are important factors in any consideration of the development of future pension arrangements and raise serious questions about the capacity of the present financing arrangements to meet these emerging costs and is an issue that must be addressed. The pensions industry is also placing considerable emphasis on this issue at present.
The final report of the National Pensions Board, "Developing the National Pension System", raised and considered these issues. This report is being considered within my Department at present and I intend to bring forward, in due course, proposals based on its recommendations.
In this context, a major survey of occupational pension schemes, which was recommended in the National Pensions Board report, has been commissioned and will be available next year. The last major survey was carried out in 1985 and the results of the new survey, which is being financed mainly by my Department, will give essential up-to-date information on occupational cover, which will be of considerable assistance when proposals in relation to pensions are being formulated.
I have also stated frequently in recent times that demands to abolish or significantly reduce contributions to the social insurance fund are short-sighted given the demands which are currently being placed on it and which will grow in the years ahead. We must preserve the principle of solidarity embodied in the PRSI system if we are to guarantee pensions needed in the future due to the ageing of the population.
I would like to stress that there is no danger to anyone's pension entitlement. However, as I pointed out earlier, this is an issue which we cannot afford to ignore. Provided we face up over the next few years to the needs which we know will arise because of the demographic changes, we can plan to deal with them in an orderly and effective way.
I am glad the Minister is taking seriously this matter which is of concern to many people. I might have couched my question in different terms given that some people, including Members of this House, are seeking to reverse the greying process. We will not get away with this indefinitely. Has the Minister had any meetings with the pensions industry on this matter? Recent reports suggest that the State will find it increasingly difficult to fund pensions as the age profile of the population gets older. There must be co-ordination between the Government and the pensions industry on this matter.
I could not detect a question in what the Deputy said.
This is another of the smart alec responses we have had from the Minister. I asked a specific question——
The Deputy did not ask a question.
——and I will repeat it: has the Minister had any meetings with the Irish Association of Pension Funds on this matter? This is Question Time and I would like the Minister to do me the courtesy of giving me an answer, not a smart alec reply every time I seek information.
I said I did not detect a question in what the Deputy said. There was so much waffle in what he said——
The Minister would know all about that.
——that it was hard to detect a question. I thought it was his party leader who was into waffle.
The Minister would know all about that; his party has been at it since 1992.
Let us hear the Minister's reply.
The people in Wicklow will be telling the Minister about it shortly.
I have already been in Wicklow and the reception has been stupendous.
We will wait and see.
The Deputy will be a sad man on 29 June.
We will take the Minister up on that.
The reply to the question is that I have met the Irish Association of Pension Funds.
The time for Priority Questions is exhausted. We may take Question No. 31 in the category of ordinary questions.
