Dáil Éireann - Volume 587 - 15 June, 2004
Written Answers. - Pension Provisions.
Mr. Howlin Mr. Howlin
79. Mr. Howlin asked the Minister for Social and Family Affairs her views on whether the scheme proposed recently by the Irish Insurance Federation to open pension accounts for children here can address the current shortfall in money being put away for pension schemes; her further views on whether the Government should encourage more investment in pension schemes rather than have persons reliant on the State pension; and if she will make a statement on the matter. [17704/04]
Mr. M. Higgins Mr. M. Higgins
84. Mr. M. Higgins asked the Minister for Social and Family Affairs if she plans to announce a pension scheme for children that would see the Exchequer contribute a fixed amount annually to pension accounts for the 1.1 million children here; if she has examined the viability of such a scheme in view of the fact that less than half of the population is saving for their retirement; and if she will make a statement on the matter. [17703/04]
Mary Coughlan Mary Coughlan
Mary Coughlan: I propose to take Questions Nos. 79 and 84 together.
Data compiled by the Central Statistics Office on pensions coverage have indicated that just over 50% of workers have supplementary pensions cover. The Government aims to increase this to 70% in accordance with the targets sug gested in the national pensions policy initiative, and I am aware that this is an ambitious target.
The overall objective of the Government’s pension policy is that all citizens will have an adequate income on retirement — the main components being the social welfare pension and supplementary pensions, either on an occupational or personal basis. In this regard, the Pensions (Amendment) Act 2002 provided for the introduction of personal retirement savings accounts, PRSAs, which became available to the public in 2003. The PRSA is a low cost, flexible pensions product which is the main instrument employed in furtherance of Government policy to increase supplementary pensions coverage. Take-up of the new accounts is being monitored closely.
In addition, a national pensions awareness campaign is being run by the Pensions Board on the behalf of the Government to encourage people to consider their requirements for retirement and to make the necessary provision as early as possible. In this regard €500,000 was provided for the campaign in each year for 2003 and 2004. The view of all participants in the national pension policy initiative was that the current voluntary approach to supplementary pensions should not be changed at this stage.
The Government is required, under the Pensions (Amendment) Act 2002, to review progress in relation to the level of pension coverage by September 2006. If, at that stage, I am not happy with the progress being made in pursuit of our objectives on supplementary pensions coverage, other measures will have to be considered, which would include an examination of some form of mandatory cover. In this regard I welcome the suggestions made by the Irish Insurance Federation at their recent conference on “Closing the Irish Savings Gap”. The federation, whom I met, has made a number of interesting and imaginative suggestions, including the creation of pension funds for children, on how people can be encouraged to save for their retirement.
At our meeting, I suggested that the IIF should pursue their proposal further and might wish to submit it for consideration to the Pensions Board, which is a representative body and has a statutory role to advise me on pensions policy.
Dáil Éireann 587 Written Answers. Pension Provisions.