Tanaiste considers plan for universal pensions
THE Government has moved a step closer to establishing a mandatory pension plan.
Social Protection Minister Joan Burton has indicated that she is considering proposals which could force private sector employees to contribute 9pc of their salaries to a universal scheme.
Currently only half of the working population has a private pension scheme, which will put huge pressure on the State pension in the future.
But Ms Burton said the government will move towards universal cover in the private sector now that the economy is experiencing significant growth.
The Tanaiste cited the pension model adopted in Australia - where employees contribute 9-12pc of their salaries.
She said that a "road map" for the roll-out of the plan will be agreed by a number of government departments next year.
This could result in the first stages of a mandatory pension plan being agreed this side of the general election.
While the Opposition has claimed that such a scheme could pose a strain on low income earners, the government will insist that too many employees are relying on the State pension.
Ms Burton said this week that approximately 17,000 additional pensioners come into receipt of the State pension every year. The over 65-year-old population is projected to increase from 11pc of the total population in 2010 to 15pc by 2020. The projected increase in the number of pensioners warrants a significant response in the form of a mandatory pension scheme, the minister added.
In a statement to the Irish Independent, a spokesperson for Ms Burton said that the pension system will be reformed in order to achieve "universal coverage" with a focus on lower paid workers.
"Development of this roadmap will involve detailed consideration of policy and operational parameters and will include co-operation across a range of Government departments and engagement with all sectoral interests," the spokesperson said.