I propose to take Questions Nos. 37, 38 and 55 together.
The Pensions Board recently presented me with its report on the National Pensions Policy Initiative entitled Securing Retirement Income.
In response to the main recommendations of the report, I issued a four page document called Action on Pensions which was circulated to all Deputies along with the report itself. This document, for the first time in the history of the State, set out a clear Government plan to secure the future of our older people.
Overall, the recommendations of the Pensions Board involve the development of strong first pillar social welfare pensions based on social insurance and major improvements in our second pillar — occupational and personal pensions.
The Government in its response to the main recommendations of the report has, inter alia, noted the recommendation to increase the social welfare pension over a five to ten year period to 34 per cent of average industrial earnings. In this regard, a key priority, as part of the Government action programme for older people, is substantial social welfare increases, including increases in the old age pension to £100 per week over a five year period. An important step to achieving this objective was taken through the £5 per week increase granted in the 1998 budget.
The whole question of increases in the rates of social welfare pensions and the PRSI financing implications of these will fall to be examined in the context of the overall budgetary situation and economic climate.
Working groups are being set up to examine fully the recommendation for an explicit fund to minimise the additional burden on future generations of taxpayers from the proposals contained in the report, to progress the setting up of the personal retirement savings accounts recommended by the board, which has been accepted in principle by the Government, and to examine further and progress the report's proposals regarding the introduction of more simple and flexible tax arrangements which again have been accepted in principle by the Government. This group will also examine, at my request and that of the Government, the issue of an earnings cap in relation to tax relief on pensions.
The Government welcomes the board's target of achieving 70 per cent second pillar pension coverage of those over 30 years of age and also supports the board's recommendations on an effective education and awareness programme. I have also undertaken to initiate a review of the Pensions Board, when appropriate and in the light of developments.
The Government has also accepted the board's proposals in relation to access, vesting, preservation and revaluation and integration. These will require amendments to the Pensions Act and will be introduced at the next suitable opportunity.
With regard to the timescale for implementation of the proposals, Deputies will appreciate that, in view of the working groups and probable need for detailed legislation, it is difficult to be precise on this aspect. However, I am committed to implementing the proposals as quickly as possible.