Dáil Éireann Debate, Wednesday - 23 February 2005
86 Mr. S. Ryan asked the Minister for Social and Family Affairs the steps he intends to take to increase the number of workers in the private sector who have pensions; his response to recent data from the Irish Pensions Board which show that only a quarter of the workforce have adequate pensions savings; and if he will make a statement on the matter. [5893/05]
Amharc ar fhreagra97 Mr. Eamon Ryan asked the Minister for Social and Family Affairs if the failure of many employers to provide matching contributions to their employees’ PRSAs is undermining that scheme. [6077/05]
Amharc ar fhreagra126 Mr. Gilmore asked the Minister for Social and Family Affairs the level of uptake of PRSAs; if he has plans to review the scheme given the low level of interest in the accounts. [5894/05]
Amharc ar fhreagraI propose to take Questions Nos. 86, 97 and 126 together.
It is Government policy to encourage people to participate in occupational and private pension arrangements so that they can, when they retire, maintain their pre-retirement standard of living at a reasonable level.
To this end a range of measures have been introduced over the last few years including personal retirement savings accounts, PRSAs, mandatory PRSA access where occupational schemes are not available, and an ongoing national pensions awareness campaign.
At the end of December 2004, some 46,237 PRSA accounts were open with a total asset value of €178 million. The comparable figures for 2003 are 19,022 accounts with an asset value of €19 million. In terms of overall occupational and private pensions coverage, CSO figures for the first quarter of 2004 show that 52.4% of persons in employment have a supplementary pension. This is a small increase on the 2002 figures which showed coverage at 51.2%.
The key target group for Government action in the supplementary pensions area is those who are 30 years of age and over. The national pensions policy initiative suggested that up to 70% of this group will need to supplement their social welfare pension to maintain living standards in retirement. The most recent CSO figures suggest that 59.1% of people in this group have the necessary pensions cover and, again, this is a small increase on the 2002 figure of 57.4%.
Over the last few years there has been a steady increase in the number of people taking out PRSAs and in those participating in standard occupational schemes. However, at this stage it has to be accepted that at the present rate of progress we will not achieve our targets within any kind of reasonable timescale.
Pensions Board research has shown a high level of awareness among the public in relation to pensions issues resulting from the awareness campaign conducted by the board. However, we are having only limited success in translating this high level of awareness into improved coverage. The reasons for this are multi-faceted. While, as suggested, the attitude of employers may well be a factor, Pensions Board research has highlighted other issues such as perceptions of affordability and a lack of urgency in relation to pensions among certain age groups in the population.
As the Deputies may be aware, a statutory review of pensions coverage and related issues is required to be completed by September 2006. However, I consider that the coverage situation is unlikely to improve dramatically over the next year and, in the circumstances, there is little point in delaying the review until 2006. Accordingly, as already announced, I have recently asked the Pensions Board to commence work on a comprehensive review of our overall pensions strategy, including possible alternatives to our present approach.
I am anxious to ensure that this is completed in the shortest possible timescale so that I can review the situation and decide what further action is required in this area. At the end of the day we must ensure that we can deliver on our commitment to provide an adequate retirement income for all.
