Mandatory pension contributions must be handled with care – O’Dea

Fianna Fáil Spokesperson on Social Protection and Social Equality, Willie O’Dea TD, says a hidden part of the Government’s Medium Term Economic Strategy (MTES), which will force workers to make mandatory pension contributions, must be handled with care and should not be used as an extra tax on work.

“In the MTES announced today, the Government has supported the introduction of a universal supplementary pension scheme for all workers.

“This cannot be introduced in isolation, it must come hand in hand with wider reform of the pension sector, which has been promised but not delivered on.

“The Government’s Pension levy is going to be made permanent despite assurances to the contrary. On top of this, the new funding rules recently introduced by the Government will force many Defined Benefit Schemes to become Defined Contribution Schemes where people will have the privilege of paying the levy to guarantee the pensions of those lucky enough to remain in Defined Benefit Schemes.

“The private pensions industry badly needs to be reformed before there is any talk of the mandatory imposition of contributions. This must be handled with extreme care by the Government and I would urge Minister Joan Burton to be up front with what she has planned.

“So far there has been little or no transparency with the considerable extra charges that have occurred which have eroded the value of pensions in smaller schemes by almost one third.

“This will end badly if the Government doesn’t use the opportunity to provide the real reform to the pensions industry that Minister Burton has repeatedly promised.”