Written Answers. - Pension Provisions.
Kathleen Lynch
Question:
86
Ms Lynch
asked the
Minister for Social and Family Affairs
her plans to review pensions legislation in three years' time to decide whether employers should be obliged to contribute to personal retirement savings accounts; and if she will make a statement on the matter.
[24209/03]
Under the new pensions framework established by the Pensions (Amendment) Act 2002, certain obligations have already been placed on employers to the extent that, with effect from 15 September last, they are required to provide access to personal retirement savings accounts, PRSAs, for employees if they do not operate a pension scheme or exclude some employees from a pension scheme.
An essential aim of this new pensions framework is to increase pensions coverage from its current level of just over 50% towards the agreed national pensions policy initiative, NPPI, target of 70% of the workforce over age 30. All parties to the social partnership agreement, Sustaining Pro gress, have agreed to co-operate to promote improvements aimed at achieving this target.
Progress towards this target will be reviewed on an ongoing basis by my Department and the Pensions Board using data collected from a combination of sources. One source will be the data the Pensions Board is collecting on a quarterly basis from PRSA providers with regard to PRSA contracts and contributions. In addition, the Pensions Board keeps a register of occupational pension schemes and the numbers of members concerned.
Another source will be future CSO surveys along the lines of the 2002 CSO pension survey which established a benchmark against which future progress can be measured. That survey gives data on pensions coverage of employees and the self-employed broken down under various headings including sex, age, marital status, economic sector, occupation and hours of work. A survey under these headings will be repeated in the first quarter of 2004, 2005 and 2006. A more detailed survey will be carried out in the fourth quarter of 2005, the content of which is under discussion with the CSO at present.
All these data will feed into a report which, under the pensions legislation, is required by September 2006. In the event that that report indicates a significant failure to increase pension coverage, I will consider all options open to me.
In relation to the option outlined by the Deputy of obliging employers to contribute to PRSAs, while clearly there would be a need to balance the costs of compulsion with the benefits it could achieve, I have often said that measures along these lines would have to be very seriously considered, in due course, if the current approach does not succeed.
