Vol. 454 No. 6
166 Mr. Hughes asked the Minister for Social Welfare the action, if any, he proposes to take to encourage persons to plan for their retirement and contribute to private pension plans to supplement anticipated lower real value of their state pensions in future years as a result of the dramatic increase in the number of pensioners at the turn of the century. [11349/95]
167 Mr. Hughes asked the Minister for Social Welfare in view of the prediction that the number of pensioners early in the next century will be two thirds more than at present, the impact this will have for funding such pensions; and the actions, if any he proposes to take to ensure adequate coverage for both private and public pensions. [11350/95]
It is proposed to take Questions Nos. 166 and 167 together.
The Government is committed to the promotion of occupational pensions. There are some 500,000 people approximately who are members of occupational pension schemes and we would like to see this number grow. Pension funds are a very successful vehicle for savings for workers to provide for themselves and their families and with assets of almost £14 billion they make a very important contribution to the economy. The tax treatment of occupational pension schemes, which is the responsibility of my colleague the Minister for Finance, has had a strong positive influence on the development of occupational pension schemes over the years.
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 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, which must be addressed, about the capacity of the present financing arrangements to meet these emerging costs. The pensions industry is also placing considerable emphasis on these issues at present.
