Dáil Éireann Debate, Tuesday - 20 June 2006
79 Mr. Costello asked the Minister for Social and Family Affairs if he has received the report from the Pensions Board that he requested regarding mandatory pension options; its main findings; if it is not complete, when he expects to receive a copy; and if he will make a statement on the matter. [22980/06]
Amharc ar fhreagra96 Mr. Broughan asked the Minister for Social and Family Affairs his plan to reform Irish pensions; if this new system will include a form of mandatory saving; when he plans to launch and implement this plan; and if he will make a statement on the matter. [22979/06]
Amharc ar fhreagra108 Mr. Deasy asked the Minister for Social and Family Affairs if he has received a report from the Pensions Board on the issue of mandatory or quasi-mandatory pensions; and if he will make a statement on the matter. [23089/06]
Amharc ar fhreagra117 Mr. Coveney asked the Minister for Social and Family Affairs the progress which has been made toward the Government target of 70 per cent of those in employment, over 30 years of age having supplementary pension coverage; and if he will make a statement on the matter. [23085/06]
Amharc ar fhreagra131 Mr. Eamon Ryan asked the Minister for Social and Family Affairs if his Department in conjunction with the Pensions Board have considered the viability of a pension opt-out scheme as was recently proposed in the UK. [23006/06]
Amharc ar fhreagraI propose to take Questions Nos. 79, 96, 108, 117 and 131 together.
As the Deputies will be aware, in early 2005 I asked the Pensions Board to bring forward by one year a review of our overall pensions strategy because I considered that, on the basis of the progress being made, there was little prospect of reaching our targets for pensions coverage in any kind of reasonable timescale. Pensions coverage for the key target group, those aged 30 years and over, stood at 58.6% in the 1st quarter of 2005. This coverage rate has moved little in recent years. The Pensions Board completed its work in November 2005 and I published the report in January.
The Board has reaffirmed the various targets recommended in the original National Pensions Policy Initiative which included a retirement income, from all sources, of 50% of pre-retirement income, a social welfare pension equating to 34% of average industrial earnings and a supplementary pensions coverage rate of 70% for those aged over 30 years. The Pensions Board has recommended enhancements to the current voluntary system of supplementary pensions as it considers that it has the potential to deliver significant improvements in coverage.
However, no truly voluntary pensions system has delivered the sort of coverage rates for which we are aiming. I have said on many occasions that if we are to achieve our overall targets we may have to consider a more radical approach. Accordingly, I have asked the Pensions Board to explore in more detail the ideas for a mandatory or quasi-mandatory system it put forward in its report on the National Pensions Review. The ideas explored in the Pensions Review range from a mandatory system built up on the existing private sector system to a greater role in pensions provision for the PRSI system.
As part of the review the Board will examine the UK's proposed Pensions Savings Scheme. This proposal involves employees being automatically enrolled into a pension when they start a new job. They will be able to opt out, but if they do not, they will be obliged to pay in 4% of any earnings between £5,000 and £33,000 a year. This will be matched with 3% from their employer and 1% from the State.
I expect to receive the Board's final report in the coming weeks. The challenge in the months ahead will be to agree on a set of reforms which will deliver on the objective of an adequate income for all in retirement.
