Sir, – I was shocked, but not totally surprised, to read that Fianna Fáil, Fine Gael and the Greens might be thinking of letting house-buyers "raid their pension pots" in order to help buy a home ("Raiding pension pots the latest hare-brained solution to property crisis", Business Opinion, June 10th). Eoin Burke-Kennedy says that this is "one of the crazy, hare-brained ideas being considered" as part of their programme for government: encouraging people to dissolve some of their retirement savings "to deliver the necessary profit margins for builders". He also cites a lot of other good reasons why such an idea should be rejected.
It’s unfortunate that any discussion about pensions, in the current context of government formation, seems to have focussed exclusively on whether or not to keep raising the State pension age. Because the solution to increased longevity, which most of us welcome, is not to just keep raising the pension age, be it the state pension age, or the age at which people retire in the public or private sector and get their occupational or personal pension. There are better alternatives, but there isn’t just one simple solution. What’s needed is a multiplicity of imaginative changes, which will enable people to retire at different ages and to save accordingly. What’s needed is to start saving for retirement much earlier and for everyone to have the opportunity to save. What’s needed is for employers to be more flexible about retirement ages, even if the State has to have a fixed age for the state pension. And what’s needed is for tax-relieved pension savings to be partly or wholly invested in socially and environmentally friendly ways, in sustainable industries that are in the long-term interests of society as a whole.
For many years, Siptu advocated the idea of starting pension savings at birth, with a substantial, once-off addition to the first child benefit payment. This would be earmarked for a "baby pension" and could then be augmented by tax-free contributions (within strict limits), initially by parents, grandparents, etc. and later by employers and the grown-up babies themselves. More recently, Chris Johns (Business Opinion, April 12th), put forward the idea of giving every baby €5,500, to be invested so as to fund a pension. Not only did he put this in the context of reducing income inequality in the future, but he put figures on what such an investment could produce by the time the person reached retirement age (the equivalent of the state pension). Such ideas could usefully be combined into a radical and comprehensive plan for future pensions, building on the good work done by the Government on auto-enrolment. And let's hope that the next government can resist the temptation to give away pension funds to builders, in order to "deliver the necessary profit margins" to them at the expense of future pensioners. That would be a seriously backward step. – Yours, etc,
ROSHEEN CALLENDER,
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Blackrock, Co Dublin.