Lack of pension take-up 'worrying and serious'

Radical and original solutions are required to increase pension coverage in Ireland according to Minister for Social Affairs Séamus Brennan.

Speaking at the unveiling of a campaign to highlight the importance of pensions, Mr Brennan said it was clear there was a pensions problem in Ireland.

He said the take-up of pensions by the Irish workforce was "worrying and serious".

Out of a national workforce of around two million people, Mr Brennan said an estimated 900,000 workers do not have the necessary pension cover to increase their income when they retire.

The Minister said that unless urgent action was taken, many would have to rely on the State welfare pension as their main source of income in their retirement years. He added that the Government was on target to increase the weekly state welfare pension to €200 by the year 2007.

Mr Brennan said radical and original solutions were required to increase pension take-up and he had asked the Pensions Board to look at three specific areas in their review of the national pensions strategy.

He said the board would examine the possibility of introducing a mandatory pension scheme or at introducing more compulsion into the pension system. It will also address the possibility of how best to tap into the culture of saving as created by the SSIA scheme.

The board has also been asked look at extending retirement age from 65 to 70 for those who wish to remain in the workforce for a longer period.

The Minister also said the Government would assess the impact of tax relief on pensions - which runs at around €1.5 billion per year - as, according to the Minister, the reliefs may not be achieving the wider pension coverage required.

This week is National Pensions Action Week.