Review board divided over making pensions compulsory

Mandatory issue:The National Pensions Review Board is unable to agree about backing a system that would force workers to provide for their retirement.

The board's report shows that it was not able to reach any firm conclusions about introducing mandatory pension schemes for workers. The Government is said to be considering such a scheme as one way of tackling the pensions deficit that the State is facing in the long-term.

The chapter of the board's report dealing with mandatory pensions sets out the arguments for and against, but does not make any recommendations because the board is divided over the benefits of the proposal.

Summarising the arguments, the report states that some board members believe that the mandatory approach is the only certain way of meeting the Government's pension policy targets, and should be considered urgently.

"However, others believe that the cost of this certainty is too great in terms of potential economic and other impacts," it says.

The report states that key issues that should be considered include the pension industry's ability to provide a fair and competitive service, its possible impact on other forms of saving, and the likelihood that compulsion could lead to State liability were the scheme to lose money or collapse.

It is also undecided about the issue of whether or not all workers should be included, or just those entering the workforce or born after a particular year.

But it says that limiting it to one category could hit those workers' job prospects as they would cost employers more.

The board says that if this approach were taken, it would have to include measures that protected these workers in that situation.

However, it is adamant that the current pay-related social insurance system, which it says is a form of mandatory pension, should be kept.