Unions fear new pension may be 'squandered'
Published 04/10/2016 | 02:30
Union leaders have warned that workers without pensions may not pay into a new state-run scheme due to fears their savings will be "squandered".
An internal Irish Congress of Trade Unions document also criticises the Pensions Authority for taking €25m from workers in fees while the value of their pensions collapsed.
It accuses the regulatory body, now chaired by Congress's former general secretary David Begg, of taking €10 from each pension scheme member per year "for no added value" and says it does nothing to protect defined contribution pensions.
The unions' umbrella body document supports the setting up of a universal pension scheme during this government's tenure so that the next generation of workers will enjoy some form of decent pensions.
The establishment of a universal scheme is being championed by Social Protection Minister Leo Varadkar, although he has not said when it will be set up.
But the union leaders warn that it must be protected from ineffective regulation and government levies and must not be used to replace the state pension.
The document says the pension crisis and refusal of those in authority to admit the scale of the problem meant workers have a "major lack of confidence" in funded pensions.
"Unless workers can be convinced that the industry and the regulatory system have learnt from past mistakes, there will be little worker enthusiasm for paying contributions into a fund that could be ineffectively regulated, subject to confiscation by government levies and squandered in ill-advised investment decisions," it says.
It says the Pensions Authority, the Department of Social Protection and the Government "have not formally recognised the scale of the pension catastrophe and carry on as if nothing of significance has occurred". The document by the Sub-Committee on Pensions, says the system of regulating pensions in Ireland is expensive, inefficient and ineffective.
ICTU pensions expert Fergus Whelan said there are only 430 vulnerable defined benefit schemes left from 1,500 healthy ones a few years ago.