Vol. 492 No. 5
37 Proinsias De Rossa asked the Minister for Social, Community and Family Affairs if he will outline those recommendations accepted by the Government in regard to the report of the national pension policy initiative; the steps, if any, being taken to have them implemented; the recommendations not accepted by the Government; and the reasons in this regard. [14337/98]
38 Mr. Ferris asked the Minister for Social, Community and Family Affairs the way in which he intends to deal with the report of the Pensions Board. [14453/98]
55 Mr. J. O'Keeffe asked the Minister for Social, Community and Family Affairs whether he has responsibility for ensuring that the recommendations of the Pensions Board report are implemented; and, if so, the timescale proposed in this regard. [14288/98]
I propose to take Questions Nos. 37, 38 and 55 together.
The Pensions Board recently presented me with its report on the National Pensions Policy Initiative entitled Securing Retirement Income.
In response to the main recommendations of the report, I issued a four page document called Action on Pensions which was circulated to all Deputies along with the report itself. This document, for the first time in the history of the State, set out a clear Government plan to secure the future of our older people.
Overall, the recommendations of the Pensions Board involve the development of strong first pillar social welfare pensions based on social insurance and major improvements in our second pillar — occupational and personal pensions.
The Government in its response to the main recommendations of the report has, inter alia, noted the recommendation to increase the social welfare pension over a five to ten year period to 34 per cent of average industrial earnings. In this regard, a key priority, as part of the Government action programme for older people, is substantial social welfare increases, including increases in the old age pension to £100 per week over a five year period. An important step to achieving this objective was taken through the £5 per week increase granted in the 1998 budget.
The whole question of increases in the rates of social welfare pensions and the PRSI financing implications of these will fall to be examined in the context of the overall budgetary situation and economic climate.
Working groups are being set up to examine fully the recommendation for an explicit fund to minimise the additional burden on future generations of taxpayers from the proposals contained in the report, to progress the setting up of the personal retirement savings accounts recommended by the board, which has been accepted in principle by the Government, and to examine further and progress the report's proposals regarding the introduction of more simple and flexible tax arrangements which again have been accepted in principle by the Government. This group will also examine, at my request and that of the Government, the issue of an earnings cap in relation to tax relief on pensions.
The Government welcomes the board's target of achieving 70 per cent second pillar pension coverage of those over 30 years of age and also supports the board's recommendations on an effective education and awareness programme. I have also undertaken to initiate a review of the Pensions Board, when appropriate and in the light of developments.
The Government has also accepted the board's proposals in relation to access, vesting, preservation and revaluation and integration. These will require amendments to the Pensions Act and will be introduced at the next suitable opportunity.
With regard to the timescale for implementation of the proposals, Deputies will appreciate that, in view of the working groups and probable need for detailed legislation, it is difficult to be precise on this aspect. However, I am committed to implementing the proposals as quickly as possible.
I congratulate the Pensions Board on the production of the report on the NPPI, the national pensions policy initiative. I welcome the Minister's support for it, as far as that goes. Which recommendations of in the pensions policy initiative does the Minister not accept? Or does he accept them all?
I refer the Deputy to the document which was the Government's response. I can send him a copy if he does not already have one. It was an immediate response which details, in a fairly easy to read way, all the recommendations and the action we propose to take on each of them. I echo the Deputy's sentiments. The Pensions Board has carried out a very good exercise for us. I compliment the Deputy on being part of the initiation of this whole process.
My concern is to establish whether the Minister feels that any of the recommendations in the report are not implementable. I recognise that the document produced by the Government is a very simple and straightforward overview of a very complex issue. However, the language used in the——
The Deputy must ask a question.
What is the difference between "accepting in principle", "deserves full examination", "notes and welcomes" and "agrees to examine further"? Is the Minister telling the House he accepts all the recommendations in principle, that some of them can be implemented immediately and that some need more examination in terms of how they are to be implemented? Or does he believe that some of the recommendations are not implementable?
Broadly speaking, we should achieve all the recommendations, which is what we are saying in the Action on Pensions document. That is why we undertook in a number of instances to set up working groups to achieve the recommendations of the NPPI. The Government sees the report as a map for the future in regard to providing security for our older people. We recognise this issue will not be addressed by just this Government but also by future Governments and policy makers for quite a number of years.
The future demographic changes outlined in the actuarial report which was factored into this examination of the pensions issue show conclusively that the ratio between our working and ageing populations will change very dramatically over the next 60 years. It will be on the plus side for only the first 20 of those years. We need to plan now to ensure that we have sufficient resources to provide for a much greater proportion of an older population. The Government accepts the recommendations of the report and will be endeavouring, as far as possible, to look at all the issues the recommendations raise. Some of them can be easily implemented. Others will require further examination with a view to implementing them, if at all possible, in the future.
I also pay tribute to the Pensions Board for producing this document. In the document, Action on Pensions, the Minister has been vague on many issues. There is one issue about which I am concerned. It relates to the uptake of pension schemes by young people. The board recommends that an education programme be put in place to advise young people of the importance of this. Will the Minister advise me whether he intends to put money into an awareness programme for young people? It would be money well spent in the long run. Will the Minister take it up as a priority?
I accept what the Deputy says. The Government agrees with the board on the importance of information and has asked the Department of Social, Community and Family Affairs to examine how this can be pursued in consultation with other Departments and pension boards. That will be done.
