Cantillon: Burton playing politics with pensions

Ireland is heading for compulsory workplace pensions, but not quite yet. Tánaiste and Minister for Social Protection Joan Burton has announced the establishment of a Universal Retirement Savings Group, making a big play on the need for radical reform of the pensions system. Failure to do so, she warned, would compromise the Irish pensions system, " endangering the retirement income of current and future pensioners".

The new group is charged with bringing recommendations to the Minister for phasing in an "efficient and effective" universal pension system and the key features and provisions of such a scheme.

The announcement, however,did not mention a specific deadline for any of this.

Successive Irish governments have spent far too much time playing politics with pensions. It is close to 10 years since one of the Minister’s predecessors, Fianna Fáil’s Séamus Brennan, indicated serious interest in introducing some form of mandatory retirement savings in Ireland – and he was nowhere near the first to commission reports and establish advisory groups charged with reforming our creaking pension structure.

In fact, his focus on mandatory pensions was as much a means of long-fingering action on other recommendations of the 2005 National Pensions Review he had commissioned on pension reform.

Concern with improving private sector pension coverage in Ireland goes back to the National Pensions Policy Initiative, which was established in 1996. In all that time, there has been precious little improvement in figures for coverage and adequacy. If anything, most people are less secure on the issue as final salary, or defined benefit, schemes become increasingly rare outside the public sector.

The current administration is no different. Burton promises that the universal pension will lead to “improved outcomes in terms of income adequacy for future retirees” but she notes also that any definitive operational date for a universal pension “will require careful consideration and will be influenced by a wide range of factors and the presence of a favourable economic environment”.

That means you can expect nothing this side of a general election.