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.