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Pension Provisions.

Dáil Éireann Debate, Wednesday - 7 February 2007

Wednesday, 7 February 2007

Ceisteanna (52)

Gerard Murphy

Ceist:

133 Mr. G. Murphy asked the Minister for Finance his views on the options for pension reform; and if he will make a statement on the matter. [4161/07]

Amharc ar fhreagra

Freagraí scríofa

As I stated in my reply to question No. 39171/06 on 22 November last, the Government's position on pension reform is reflected in the statement issued in August by my colleague the Minister for Social and Family Affairs when the Report of the Pensions Board on Supplementary Pensions — "Special Savings for Retirement" — was published. This statement recognised the many challenges in relation to pension coverage, while also making it clear that no pension system is worthwhile unless it is sustainable. It also highlighted the need for any examination of pensions policy to recognise the following facts:

that the number of persons aged 65 is projected to double from a current level of some 464,000, to nearly one million by 2030;

the public cost of providing for those in this age group will rise from 13% of GNP to over 17%, apart from other pressures or enhancements to social welfare or public services;

there are over 4 workers contributing to the support of every pensioner at present; this will fall to 2.7 in 20 years time and to less than 1.5 workers per pensioner in 50 years time;

that people are living longer, healthier lives and this, in itself, must inevitably mean a longer working life is possible and that a higher pension age overall may in time become the norm.

The Government is committed to publishing a Green Paper on Pensions Policy outlining the major policy choices and challenges in this area. Work on the Green Paper, which will take account of the views of the social partners, is being progressed by my colleague the Minister for Social and Family Affairs. The Government is also committed to responding to the consultations arising from the Green Paper within 12 months of the ratification of Towards 2016 by developing a comprehensive framework for addressing the pensions agenda over the long term.

The financial and economic sustainability of our pensions system is extremely important in the context of any future decisions the Government may take in this area. Changing demographic trends over the coming years will present a number of significant interrelated challenges which can only be addressed if the economy remains competitive and improves its long-term growth potential. It will be vital that policy development in this area is underpinned by a comprehensive assessment of the impact on competitiveness and macro-economic performance so that the right mix of policies can be developed for the long-term.

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