Tuesday 17 January 2006: The Report of the National Pensions Review carried out by the Pensions Board at the request of the Minister for Social and Family Affairs, Séamus Brennan, TD, was launched by the Minister at a press conference in Government Buildings today.
The proposals recommended by the Board for immediate implementation are:
? Introduction of matching contributions for PRSAs.
? Higher rate tax relief for all personal pension contributors.
? Reduced regulation of Standard PRSAs.
? Incentives for SSIA proceeds to be invested in pensions.
? Retiree option to defer Social Welfare pension.
Recommendations for further consideration include:
? Detailed research on women’s pension coverage rates.
? Regular projection of Social Welfare pension costs.
? Automatic enrolment in a pension scheme.
? Ongoing pensions awareness and education campaigns.
? Review of Defined Benefit Funding Standard
? Progress review in 2008.
The key messages arising from the Report are:
? A significant increase in the annual costs of Social Welfare retirement pensions and public service pensions is predicted which is much greater than previously expected.
? Good pension provision has a very high cost which arises however it is financed i.e. by employers, employees, individuals or taxpayers through the Exchequer.
? Supplementary pension coverage is currently insufficient and is a cause for concern. Also, there does not appear to be any improvement in the adequacy of pension provision.
? Most Board members agree that pension coverage and adequacy targets will not be met without some change to the present pension system.
? Specific changes are recommended to the current voluntary supplementary system. Many members of the Board considered that further enhancements of the voluntary system can, over time, achieve significant improvements in supplementary coverage and adequacy whilst some members believe that a mandatory approach is the only certain way of achieving the targets and that such an approach should be considered urgently.
Speaking at the Launch, Michael McNulty, former Chairperson of the Pensions Board said: “Favourable demographics give Ireland a window of opportunity to ensure adequate retirement provision, but that window is likely to have closed in 20 years’ time. The Board is therefore very pleased that the Minister has frequently stated his determination to address this issue.”
Ms. Anne Maher, Chief Executive of the Pensions Board said: “The National Pensions Review is not just about a set of recommendations. Detailed analysis and costing of the pension situation are at least as important as the recommendations and should continue to be used as a frame of reference going forward. The Board understands that further decisions must be made in the context of employment interests, competitiveness and overall economic and social considerations but the absolutely essential thing is that decisions are made.”
Tiarnan O Mahoney, the new Chairperson of the Pensions Board said today: “The Report of the National Pensions Review which is being launched today provides an excellent analysis of the current pensions situation in Ireland. This will be a valuable frame of reference for the new Board’s policy considerations and, we hope, for future pensions decision making in Ireland.”
Notes to Editors:
1. The Pensions Board is the statutory body set up to regulate occupational pension schemes and Personal Retirement Savings Accounts (PRSAs) and to advise the Minister for Social and Family Affairs, and through him, the Government, on overall pension policy. See www.pensionsboard.ie
2. The Pensions Act, 1990 (as amended) required the Minister for Social and Family Affairs to cause a report in relation to the extent of the application of occupational and other pensions, and in respect of such matters as he considers relevant, to be prepared and furnished to the Minister not later than September 2006. A copy of that report is to be laid before each House of the Oireachtas within six months of its preparation.
3. On 3 February 2005, the Minister wrote to the Pensions Board stating that he saw little point in delaying the report until 2006 and, having discussed this at Government, he asked the Board to undertake a full review of pension coverage and associated issues without delay. The Board completed its Review between February and October 2005 in accordance with the timeframe agreed with the Minister. The Report was presented to the Minister on 7 November 2005. The Minister subsequently brought it to Government and has agreed to formally launch it on 17 January 2006.
4. The main components of the Review included a public consultation process, wide ranging specialist analysis and a series of workshops with interested groups. In all, 36 submissions were received from representative organisations and individuals and these were reviewed and considered as part of the Review. The workshops provided a wide range of views.
5. The Report includes a review of previously agreed pension targets, an assessment of current coverage and adequacy and discussion of the strategic options for meeting the agreed targets. It contains an Overview and a Summary, Recommendations and Next Steps as well as the full Report and underlying Appendices.
The Report is published online at www.pensionsboard.ie
For further information:
The Pensions Board Tel. (01) 613 1900
The Pensions Board Tel (01) 613 1900
Head of Information & Training
The Pensions Board Tel (01) 613 1900
Q4 Public Relations Tel (01) 475 1444 / 087-2371838