Politics

Monday 14 July 2014

Burton hints at mandatory pension coverage

Martin Frawley

Published 06/01/2014|02:30

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Joan Burton Minister for Social Protection  pictured during the Media briefing after the  budget in Government buildings yesterday.
Pic Frank Mc Grath
Joan Burton, Minister for Social Protection. Photo: Frank McGrath

Social Protection Minister Joan Burton has indicated her support for mandatory pension coverage for workers, but only when the economy improves.

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She would welcome "constructive proposals" to widen pension coverage and ensure all workers have greater security of income in retirement.

However, at a time when she has increased the state pension age to 66, Ms Burton stopped short of agreeing to a pension summit as suggested by the chief executive of the Labour Relations Commission, Kieran Mulvey, in the wake of the settlement of the ESB dispute over a €1.6bn deficit in the company pension scheme.

Echoing similar calls by Ictu general secretary David Begg, Mr Mulvey said the government pensions regulator, actuaries, employers and unions needed to get around a table to address the growing pensions problem.

He said that most defined benefit schemes in the country were in deficit caused by poor returns on investments compounded by government regulations that required pension funds to adhere to a minimum funding standard.

This was leading to a number of industrial disputes arriving at the commission's door that were difficult to resolve and leading to tensions in the workplace, said Mr Mulvey.

DISPUTES

In the last few months alone, disputes over pensions have arisen in the ESB, which threatened a country-wide blackout, and retailer Marks and Spencer, while a pension dispute rumbles on at Aer Lingus.

Mr Mulvey said that in the past two years the commission had dealt with over 40 disputes.

Responding to Mr Mulvey's call, a spokesperson for Ms Burton said that the minister has "introduced a series of measures to address pensions issues since coming to office, including legislation currently proceeding through the Oireachtas to help tackle funding problems in defined benefit schemes".

The most recent figures show that approximately half of workers between 20 and 69 years of age have a private pension and that this relatively low coverage "is of major concern to the Government", said the spokesperson.

"Minister Burton has previously indicated that a mandatory or quasi approach such as that envisaged by an auto-enrolment scheme, using scale to achieve greater cost efficiencies for the members, is a very proactive way in which we can increase supplementary pension coverage, whilst recognising that the introduction of such an initiative would be best supported by a more favourable economic environment than is currently the case," the spokesperson added.

Irish Independent

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