Wednesday 13 November 2019

Government set to approve 'universal pension saving scheme'

Tanaiste Joan Burton
Tanaiste Joan Burton

Daniel McConnell

The Government is set to formally approve plans to introduce a “universal pension saving scheme”, can reveal.

Tanaiste Joan Burton will bring a memo to Cabinet tomorrow seeking approval to proceed with work to develop a roadmap and timeline for the introduction of the new, universal supplementary pension saving scheme. 

The scheme is intended to ensure everyone will have enough funds to cover the cost of their retirement, especially lower paid workers.

Ms Burton is also seeking approval to establish a high-level interdepartmental group to prepare this roadmap for consideration by Government. This will be chaired by her department.

Ms Burton has said previously that the need for such a scheme is clear as the rate of occupation and supplementary pension coverage in Ireland is approximately 50 pc of those in employment. 

This coverage figure reduces further to an estimated 41 pc of the working population when the private sector is considered in isolation. 

The plans to introduce a universal pension plan is in line with the Programme for Government commitment.

It was also one of the commitments agreed by Ms Burton in her talks with Taoiseach Enda Kenny after her election as leader of the Labour Party.

Ms Burton has said previously that such a scheme would be introduced only when economic circumstances are more favourable and workers' incomes have improved.

This would require a significant lead-in time in terms of development and implementation.

Speaking last year, Ms Burton said: “Private pension coverage, both in occupational and personal pensions, is uneven and needs to be increased urgently. The raison d’etre is to ensure that those who do not currently have an occupational pension are nudged towards having one.”

Ms Burton has in successive budgets sought to protect the State pension because of its “critical importance in preventing poverty amongst older people.”

Figures show that less than 51pc of people in employment aged 20 to 69 have pension coverage and this number is decreasing.

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