Friday 9 December 2016

Fianna Fáil pledges to give constitutional protection against pension fund 'raids' by government

Published 26/10/2015 | 02:30

Fianna Fáil Welfare spokesman Willie O’Dea
Fianna Fáil Welfare spokesman Willie O’Dea

Workers who save for a private pension are to be offered a constitutional guarantee that a cash-strapped government will not in future raid their pension pot.

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The pledge will be part of the Fianna Fáil election manifesto regarding social welfare due to be unveiled later this week. The plan is to run a referendum to enshrine pension fund protection in the Constitution, a referendum which would very likely be endorsed by voters.

In practice, constitutional protection would mean a cash-strapped government would need voters' permission in a future plebiscite before it could dip into private pensions to help solve its problems. These Irish funds are currently worth €100bn and remain a huge temptation to any government which may be grappling with the return of a recession in future years.

The pension levy has already dipped into people's private pension funds, taking €2.4bn away over the last four years in a move which provoked only limited controversy. Finance Minister Michael Noonan styled the levy as a temporary measure over four years to help fund job creation.

But last June he announced that it would continue for a fifth year.

The referendum-lock move could be popular with voters and put it up to Fianna Fáil's competitors, especially Fine Gael, in the forthcoming election campaign.

Fianna Fáil's welfare spokesman, Willie O'Dea, said the ageing population meant that Ireland's future pension liabilities were double the current bloated national debt. He added that experts had predicted that civil service and State pension liabilities were unsustainable.

Mr O'Dea said the Government talked about encouraging people to take out their own private pensions to offset the impending crisis of the funding shortfall. But he said the risk of "plundering" private pensions in the future acts as a disincentive.

"We must encourage people to provide for themselves and get what they're paying for," he said.

Irish Independent

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