Vol. 481 No. 5
43 Mr. Rabbitte asked the Minister for Social, Community and Family Affairs if he proposes to create a board to supervise the financing and operation of the social insurance fund; and if he will make a statement on the matter. [16438/97]
The social insurance fund is central to the provisions of social welfare services and to the economic and social life of the country. I am fully committed to safeguarding the security of the fund and in this context one of the issues I am examining for the future is the establishment of a social insurance board and its role and composition. In setting up such a board I am anxious not to add unduly to the State's bureaucracy, so one of the issues I will consider is how to ensure the board functions efficiently and does not lead to setting up a major new organisation with large staff, expensive premises, etc.
The social insurance system plays a key role in the provision of social protection in society. People, when they are economically active, make contributions to the social insurance fund according to their ability to pay and depending on the range of benefits and pensions for which they are covered. These payments fund the pensions of an earlier generation of contributors and also pay benefits to persons who are not working due to contingencies such as unemployment or illness. Contributors, accordingly, build up entitlements to various pensions and benefits which are paid to them as of right, without having to undergo a means test.
The social insurance system is based on a long-term contract between employers, employees, the self-employed and the Government. It plays a major role in income redistribution and achieves solidarity between generations and between those at work and those currently not at work.
Social insurance fund expenditure, excluding administration costs, amounted to £1,794 million in 1996. Of this expenditure, £1,176 million or 66 per cent went to pay for retirement, old age, widow's-widower's and invalidity pensions.
In recognition of the long-term importance of pensions generally and the role of the social insurance fund in the pensions area, an actuarial review of social welfare pensions was commissioned. The report of this review, which I launched on 29 September last, covers the period from 1996 to 2056. This report is an important contribution to the debate regarding future pension provision. While the report concludes that the funding position in respect of pensions, given current contribution levels, is relatively stable for the next 20 years, it also shows that the position thereafter, when a large increase in the number of older people is projected, is more serious. I intend to commission further such actuarial reviews, in line with the original recommendation of the National Pensions Board that such reviews be carried out every five years and I will be giving consideration to bringing forward legislation in this regard.
