Wednesday 23 August 2017

Minister supports SSIA-style scheme to top up pensions

Minister for Social Protection Leo Varadkar Photo: Tony Gavin
Minister for Social Protection Leo Varadkar Photo: Tony Gavin
Mark O'Regan

Mark O'Regan

A new SSIA-style savings scheme is Social Protection Minister Leo Varadkar's "preferred option" to help tackle Ireland's 'pensions time bomb'.

Introduced in 2001, the original State-backed five-year SSIA plan offered a bonus of €1 for every €4 saved monthly, subject to an agreed maximum.

Now, as Ireland faces an unprecedented pensions crisis, Minister Varadkar wants a similar type of incentive for workers to pay into their own "personal" pension fund.

The plan would provide vital additional retirement cover - on top of their state pension entitlement - and employers would also be required to contribute.

"The minister's preferred option would be an SSIA-type top-up from the Government, rather than the current system of a tax relief incentive," a spokesperson last night confirmed to the Sunday Independent.

"The SSIA top-up is very well understood, much more so than tax relief.

"It costs much the same, and would add to an individual's pension income, as the money would go into their personal pension savings account."

The fund would be made up of separate contributions from individuals, employers, and the Exchequer.

Contributions would start at a "low level" in the first year, and the fund would be phased in over a period of time.

The "favoured model" is similar to schemes in Australia, Singapore and New Zealand. Every worker would be automatically enrolled in the scheme - but could also avail of an opt-out clause.

Sunday Independent

Editor's Choice

Also in Irish News