Fianna Fáil Spokesperson on Social Protection Willie O’Dea has described CSO data on the number of workers who have an occupational or personal pension as extremely worrying. Deputy O’Dea says the previous Fine Gael and Labour Government significantly contributed to the problem by raiding private pension funds.
Deputy O’Dea commented, “What we have here is a pension bombshell waiting to detonate in the years ahead. While the State Old Age Pension will remain the cornerstone of pension provision in the country, most people do not believe this will be sufficient for their needs in retirement. The fall in the number of people who have a pension is extremely worrying but perhaps not surprising following the €2.5 billion raid Fine Gael and Labour carried out on private pension funds.
“After five years the Fine Gael and Labour government failed to develop a co-ordinated pension policy which reflects the changed nature of the workplace. Few, if any, employees now expect to be with the same employer for 40 years. There is a need to reflect this by providing for more flexible pension arrangements.
“A more dynamic pension and savings system would take account of other major life events that people have to deal with financially such as redundancy, critical illness, house purchase or debt issues.
“Amongst OECD countries only Ireland and New Zealand do not have compulsory pension saving. Under a new proposal we will be bringing forward those between the ages of 21 and the State Pension Age, and earning more than €15,000 annually, would be automatically enrolled into a pension scheme offered by their employer. This scheme would be phased in over 3 years focusing initially on larger firms.
“Employees would be given the option to opt-out of the scheme by filling in a form and returning it to their employer. Since the introduction of automatic enrollment in the UK in October 2012, almost all larger employers have enrolled their workers in a workplace pension. The proportion of people choosing to opt out has been lower than expected.
“We will examine the feasibility of the NTMA administering a national savings fund which would provide a low cost pension scheme option. The NTMA would appoint individual asset managers to invest the funds in the scheme. This would result in lower costs for scheme members.
“There is also a need to improve the circumstances in which workers can gain early access to their pension savings in clearly defined circumstances. This concept has worked successfully in other countries and can actually result in more people saving for their future as they do not see it as locking money up for decades with no chance of accessing it should they need to do so,” concluded Deputy O’Dea.