The context in which the particular references to the pension issues of interest to the Deputy were raised in the briefing document was in relation to the development of a universal retirement savings system for that half of the Irish workforce who do not have supplementary pension coverage.
Officials of my Department, together with those of other Government Departments and Agencies (as well as representatives from other organisations), have been involved in the work of the Universal Retirement Savings Group (URSG) which was established last year under the aegis of the Department of Social Protection to develop a roadmap and timeline for the introduction of a new retirement savings system to progressively achieve universal pension with particular focus on the lower paid. The scope and direction of the work of the URSG is a matter, in the first instance, for the new Minister for Social Protection, Mr. Leo Varadkar TD, who has indicated that the development of a universal retirement savings system will be a priority for his Department.
The development of a system, as referred to above, would be a long-term project which, in order to be successful, would have to involve appropriate decisions being taken by Government over time on detailed key design, operational and administrative structures. Among the many issues that would have to be decided, in this context, is the extent and nature of any State support for pension savers in such a system. While I see no reason, at this point, to change from the marginal rate relief incentive on pension contributions which applies for current pension savers, arguments have been put forward in the past, for example, for a system of direct subvention or matching contributions to pension savings to be made by the State as opposed to the provision of tax relief. I would be open to examining and considering, without prejudice, any case that might be made in this regard and this is what the reference to "other State incentive" in the briefing document is getting at.
As regards the sustainability of current pension tax reliefs, I would point out that the estimated annual cost of tax reliefs on pension contributions, based on the statistical data published by the Revenue Commissioners and available on the Revenue website, has fallen considerably in the period since 2008. Among the reasons for this, is the range of measures taken over the years to restrict the reliefs on pension contributions, particularly for higher earners.
