Insurance plan leaves employers off the hook

THE Irish Insurance Federation wants us to move from a nanny to a “nappy” state.

This week’s proposal from the group showed some brass neck. Get the parents of the next generation to pay for their children’s pensions and leave employers free of all responsibility.

The IIF has also suggested the State should put €10 per month into an account for every person under 18.

With more than 1 million people in that age bracket the cost to the State would be €450 million.

The real carrot apparently is the generous proposal from IIF that gullible parents be allowed to invest up to €50 per month in the madcap plan, before tax.

The suggestion was made at the IIF conference Closing the Irish Savings Gap in Dublin on Thursday.

Daft as it is, it is a measure of how deadly serious the pension issue remains.

Research shows the working population is under-investing by e6 billion a year, paving the way for distressing problems in 20 years, as we move to being a much older society.

It is already becoming clear the PRSA option isn’t going to work not in its present guise, if at all.

Pension Board boss Anne Maher blamed the press for negative publicity. More brass neck if you ask me, but that’s what you get when people are floundering around for answers.

One real problem with PRSAs is the failure of the Pensions Board to convince the Government to give equal tax breaks to the lower paid on their PRSA contributions.

That this wasn’t done shows a lack of reality in Government circles.

Given that the less well- off were key targets and often not that well-informed on financial issues, a serious incentive like more money in their pockets might have captured their imaginations.

Taking out a pension on an individual basis has long been the preserve of the self-employed in Ireland. To expect the near 50% of those without retirement packages to jump in just for the sake of it was a mistake.

Ms Maher’s threat to make PRSAs compulsory got the standard knee-jerk response from the small business body ISME.

ISME wants workers to take responsibility for their own retirement. Small business has enough to contend with without having to provide for their workers in their old age, it believes.

Meanwhile, as they try to get their grubby paws deeper into the economic honey pot, they want workers and the Government to take the full brunt of funding people’s retirements.

This is the American extreme right-wing free market view of the world.

It is self-serving, mean-spirited and totally at variance with the concept of the social contract.

ISME is having none of it. Flog them to death on the shop floor, pay them as little as you can get away with and then throw them on the scrap heap is becoming the prevailing view.

It means that in less than 50 years we have gone full circle.

Defined benefit plans that offered reasonable retirement options to workers are dying out.

Employers say they are too expensive and they have a point. However, an answer has to be found to this dilemma.

The IIF’s self-serving view of the world is par for the course.

The federation represents the group that traditionally has been one of the worst abusers of ordinary consumers.

The record bears this out. Their real lack of concern has been well demonstrated in the way they have overcharged on general insurance for years.

IIF’s seminar however, served a number of important functions.

It proved once more that the market is still in a shambles and that the IIF will stoop to whatever level it takes to ensure its own agenda is served.