Joan Burton warns new pension scheme should not be privatised

Joan Burton warns new pension scheme should not be privatised

Former Minister for Social Protection Joan Burton has called for the new scheme to enrol private sector workers automatically in a pension scheme from 2022 not to be privatised.

It should remain under State control, she warned.

The Labour party’s finance spokesperson told RTÉ radio’s Morning Ireland that the scheme needs to get under way as soon as possible and expressed concern that any privatisation of it would lead to significant charges for individuals.

Ms Burton said she understands that an authority will be set up to handle the pension contributions and suggested the Department of Social Protection is "well set up to handle this."

Under the plans, all employees aged between 23 and 60 earning more than €20,000 a year, and not already in a workplace pension, will be enrolled.

Employees will begin with a contribution of 1.5% rising to 6% of their salary - this will have to be matched by their employers. The State's contribution to the scheme is still under discussion.

Ms Burton said the Government "must contribute" along with the individual and the employer.

The scheme is necessary to protect private sector workers who will rely solely on the State pension as that will not be enough to provide people with a decent quality of life in old age, she said.

Funds should also be held in an individual's own name to guarantee it cannot be dispensed with by the State. She said it is imperative employers get behind the scheme to retain staff and protect the workforce into old age.

Minister for Social Protection Regina Doherty told the same programme that “there is still a sizeable amount of work to be done” on the plan such as the amount the State will contribute as a ‘top up’; the level of government responsibility; registered providers and central processing of the plan.

“We want to make sure everyone is happy and bought in to the plan.”

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