Pensions

Thursday 21 August 2014

Mandatory pension plan gets name but no start date

Charlie Weston Personal Finance Editor

Published 12/02/2014 | 02:30

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Social Protection Minister Joan Burton
Social Protection Minister Joan Burton

THE Government has come up with a name for a new mandatory occupational pension but has not given any date for its implementation.

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The new MySaver scheme is designed for those without any pension in place other than the state pension, Minister for Social Protection Joan Burton said.

The minister said that less than half of those in a job, who are between the ages of 20 and 69, have a private pension.

"This relatively low rate of pension coverage has already been identified as a key concern of government," she told an Insurance Ireland dinner last night.

"This is why the Programme for Government includes a commitment to reforming the pension system to progressively achieve universal coverage, with particular focus on lower-paid workers without occupational pensions."

There are 5.3 people of working age for every pensioner, but this is set to fall to 2.1 by 2060, the minister said. She favours an auto-enrolment scheme. There would be a "soft-mandatory approach".

This is where all those without an occupational pension are signed up for one, and they will have to sign out of it if they do not want it.

This could help address people's inertia and mean the tax benefits of saving for a pension would be more evenly distributed.

But the introduction of such a scheme would have to wait for a more favourable economic environment.

"So while the Government is committed to the introduction of a comprehensive occupational pension scheme – a MySaver for those without pension coverage – the actual go-live date will depend on the economic circumstances."

Earlier this week the Society of Actuaries in Ireland said this country should make pensions mandatory by 2019.

It said a mandatory pension system should be developed over the next five years for all workers as the best way of increasing pensions coverage.

Irish Independent

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