The quintessential ‘tomorrow’s problem’ of pensions policy is addressed

Pensions policy – or, more specifically, the lack of a policy on auto-enrolment – has been an open sore for years.

The idea of sorting out an auto-enrolment option has been mooted for decades, and has been a live option since 2007 when Séamus Brennan tabled a White Paper on it. But it is in the nature of pensions policy for tough decisions on the future to be kicked into the long grass. It is the quintessential “tomorrow’s problem” for politicians: expensive, complicated, frustrating and loaded with political risk.

The Coalition has acted, although it could be argued it would have been deeply delinquent to let the pensions timebomb become packed with yet more fissile material over the lifetime of another Government.

Nonetheless, Minister for Social Protection Heather Humphreys deserves credit for meeting it head on. Her effort has been given a broad welcome, including by no lesser body than the Irish Congress of Trade Unions, rarely a fellow-traveller for Fine Gael.

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Laura Bambrick, ICTU's head of social policy, told this digest it was a "good day for workers that we are moving to this to finally address pension coverage". She points out that for every €6 a worker pays in, their pension pot will be turbocharged with another €8 from the State and their employer, who has no choice but to pay in. "There are few things you can invest in legally that will get you that kind of return."

However, pensions policy remains such a politically volatile area that even amid the praise, there is risk. As we report this morning, the Government is facing some kickback over the fees structure that is permitted under the scheme.

The Irish Independent reported on Wednesday on an embarrassing line in the Government memo on the topic, which drew attention to the particular importance of getting the scheme away now as the dream of home-ownership slips through the fingers of an entire generation. They will have no nice, unencumbered asset to fall back on in their dotage. Even when signing off on a broadly popular intervention, the potential for pensions policy to drive home existing inequities is clear.

It’s hard to know what the acid test for success for the auto-enrolment scheme will be. Uptake is a bad metric, given the whole auto-enrolment aspect, and it won’t be clear whether people stick with it for many years. Its popularity also won’t be tested until wages start being chipped away as it kicks in – and that in and of itself could cause hassle down the road.

It is worth noting that people will start being enrolled in the scheme from January 2024, meaning those on lower incomes will still be seeing sums deducted from their pay to go towards pensions come May of that year – when the local and European elections are due to be held. It’s not like anyone in Government has had a recent issue with an ill-timed intervention on pensions just on the eve of an important election, is it?

Speaking of the last government’s flawed attempt to jack up the retirement age for the State pension to 67, that was due for final decision after multiple kicks for touch by the end of March. Heather Humphreys says a decision will be made during April, which will inevitably bring fireworks.

More on criticism of the pension scheme here.

The paper is led today by the latest on the war in Ukraine.

The front page line-up is complete by Pat Leahy's piece on amendments which would see executives at social media companies become criminally liable for online harm caused by their platforms.

Best reads

Finn McRedmond writes about the risks of total cultural boycotts of Russia, and of making pariahs of silent Russians.

Newton Emerson on the response required in the face of last week's extraordinary attack on Simon Coveney in Belfast.

Naomi O'Leary wonders whether the Ukraine crisis could nudge the European Union and UK towards a post-Brexit rapprochement.

Miriam Lord writes that the Taoiseach was eager for her to know he's back on the yokes, thankfully.

Playbook

The count to fill Ivana Bacik's former seat in the Seanad continues, with a tight race between Hugo MacNeill, Tom Clonan and Maureen Gaffney. Hazel Chu is still in touch, too.

Helen McEntee launches the new Judicial Appointments Bill at 10.15 at Government Buildings.

It's an early start in the Dáil for Stephen Donnelly, who takes oral questions at 9am, followed by Charlie McConalogue at 10.30am, before Leaders' Questions with Sinn Féin, the Social Democrats, PBP-Solidarity and Labour at midday.

Questions on promised legislation follows before lunch, and in the afternoon, there are statements on the women’s health action plan, while the second stage of the Circular Economy Bill is also to be heard.

Topical issues are at 5.45pm, followed by statements on the national maternity hospital just after 6.30pm.

The full Dáil schedule is here.

The main business in the Seanad is the committee and remaining stages of the Consumer Protection (Regulation of Retail Credit and Credit Servicing Firms) Bill 2021 at 1.15pm.

The full Seanad schedule is here.

Ivana Bacik’s committee on gender equality will hear from advocacy groups on domestic, sexual and gender-based violence recommendations from the citizens’ assembly at 9.30am.

The Public Accounts Committee sits at the same time with An Garda Síochána, while the disability committee is holding hearings on the independent and adequate standard of living and social protection and safeguarding for disabled people at 9.45am.

The foreign affairs committee meets with the special rapporteur on the occupied Palestinian territories at 1.30pm, and the agriculture committee has a session on technologies to reduce emissions in farming.

The full list of committee meetings is here.