Minister for Social Affairs Séamus Brennan yesterday reiterated his determination to radically reform Irish pensions, including the introduction of some form of mandatory saving.
The Minister was chairing the National Pensions Forum, which brought together international speakers presenting pensions options with stockholders in the Irish pensions industry.
Opening the conference, Mr Brennan noted that the recent National Pensions Review had come down in favour of tailoring incentives under the existing voluntary private pension regime to reach the Government target of ensuring that 70 per cent of those over the age of 30 have occupational or private pension coverage, rather than relying on the State pension.
"I have no doubt that generous tax relief, improved incentives and regular awareness drives should deliver increased coverage," Mr Brennan said. "However, international experience suggests that no fully voluntary system will deliver the level of pension cover we must aspire to."
He has asked the Pensions Board to compile a report by June, examining mandatory pension options.
"Rather than ask them whether or not we should do one, what I asked them to do was some analytical work on what one might look like," he said.
Among the speakers at the forum was Donald Duval, who was actuary to the Australian government when it introduced mandatory pensions in the late 1980s.
He said the scheme, which sees employers pay 9 per cent of workers' gross salaries into a pension fund, was broadly successful and improved pension coverage and competition in the market there.
However, he acknowledged the driver of change had been economic and political, rather than a concern over benefits.
The notion of compulsion in personal pension provision met strong opposition from employers and pension companies. Irish Life & Permanent group chief executive David Went said mandatory schemes were "unproven, premature and a distraction".
"I believe that to move towards such a scheme at this time - with so many opportunities still available to us to increase the success of voluntary schemes - would be a serious and costly mistake".
Ibec chief economist Danny McCoy said introducing a mandatory pension would be an "expensive, controversial and radical option".He warned that the rigorous current funding standard for pensions was "running a coach and four" through Ibec's commitment as a social partner to maintain good occupational schemes.
Ictu general secretary David Begg said that the unions were coming round to seeing the necessity for some element of compulsion.
- (Additional reporting, Reuters)
