Thursday, 20 June 2013

Questions (61)

Willie O'Dea

Question:

61. Deputy Willie O'Dea asked the Minister for Finance in view of the decision to wind up the National Pension Reserve Fund which was designed to pre-fund public sector and social welfare pensions from 2025, when he will bring forward proposals to ensure adequate resources are available to meet pension liabilities as they fall due; and if he will make a statement on the matter. [29940/13]

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Written answers (Question to Finance)

The National Pensions Reserve Fund (NPRF) was established on 2 April 2001 under the National Pensions Reserve Fund Act 2000 for the purpose of meeting as much as possible of the cost to the Exchequer of social welfare pensions and public service pensions to be paid from the year 2025 until the year 2055, or such other year as may be specified by order.

As announced last week, the Government has decided to establish the Ireland Strategic Investment Fund which will absorb the NPRF and whose resources will be channelled towards productive investment on commercial terms in the Irish economy.

While the need for the State to provide for social welfare and public service pensions obligations has not abated, fostering economic activity and employment is currently a greater priority and this will in turn put the State in a better position to meet its pensions obligations in the longer term.

I understand my colleague the Minister for Public Expenditure and Reform will initiate an actuarial review of the cost of future pensions. The Deputy will be aware of the many changes in both pay and public service pensions in recent years which will have to be taken account of in any new review. As the longer-term evolution of public service pay is a particularly important factor in determining pension costs, it will be more appropriate to start the actuarial assessment once the position on public service pay is clarified in the coming months.