Howlin rows back on plan to defuse pension 'time bomb'
Published 30/04/2015 | 02:30
Public Expenditure Minister Brendan Howlin has rowed back on his suggestion that the Government should pump billions of euros of taxpayer money into a scheme benefiting public sector workers in a bid to avoid a pension crisis.
In his Spring Statement speech, Mr Howlin warned of a pension time bomb set to cost the taxpayer an extra €200m a year over the next decade.
He said an ageing population with longer life expectancy presented "service and resource challenges" for the country's pension system but he did not outline how he planned to fund the rising pension bill.
However, the minister said he favoured addressing the pension crisis by reintroducing the National Pension Reserve Fund - which was created by former Fianna Fáil Finance Minister Charlie McCreevy in 2001 - during a press conference.
"You ask whether we should have another National Pension Reserve Fund. Bluntly, I think that would be a good thing. Michael (Noonan), obviously we will have to consider that," he said.
He added: "But over time, both of us would agree, the restoration of a Pension Reserve Fund would be a good idea, but when we are in a position to do it," Mr Howlin said."
But yesterday morning, Mr Howlin sought to downplay his previous comments while still saying he believed it was a good idea to bring back the NPRF.
Speaking to broadcaster Ivan Yates on Newstalk Breakfast, the minister claimed the Irish Independent story on his comments was "completely made up".
"I was asked a question at the press conference last night - obviously to anchor the story - whether I agree there should a pension reserve fund into the future, and I agreed there should be, but we have no plans to do that now," he added.
Mr Howlin admitted his view is that bringing back the NPRF is a "very good idea" but said the State currently did not have the capacity to bring back the fund.
Last night, a Department of Public Expenditure and Reform spokesman said the minister "stands over" his comments.
However, they did not respond to request for details on how he planned to address the pension crisis, saying the request was made too late.
During his Spring Statement speech, Mr Howlin highlighted Tánaiste Joan Burton's plans to encourage more people to save for their future.
Mr McCreevy's pension reserve fund received 1pc of the gross national product annually and was established as a war chest for public sector and State pensions.
The scheme proved divisive, with many private sector workers feeling they were propping up public sector pensions with their taxes. During the Celtic Tiger years, when the Government had increased revenue resources due to a healthier economy, the pension pot rose to €25bn. However, the fund was raided by the Government during the financial crash.