Mandatory pensions could become a reality

MANDATORY and quasi-mandatory pension provisions are to be considered to increase pension coverage of the population, according to Minister for Social Affairs Seamus Brennan.

Speaking yesterday at the annual investment conference of the Irish Association of Pension Funds, he said that, at present, Ireland has four people at work for every pensioner. But in 20 years, this will have dropped to two people for every pensioner and in 50 year’s time, there will be one person in work for every pensioner. He told the conference held in Dublin Castle that almost half of the two million workforce do not have pensions and over half of these are women.

“The number of people aged over 65 will more than treble to 1.5 million over the next few decades. The cost of our social welfare system and State pension system will spiral from just over 4% of GNP at present to almost 14% in less than 50 years,” he said. “This means that today, almost 930,000 workers and their families are facing into a retirement in which their main source of income will be the social welfare pension.” Meanwhile, IAPF Investment Committee spokeswoman Jennifer Richards said the recent turbulence in stock markets was a stark warning to the estimated 300,000 members of defined contribution (DC) schemes to take more interest in their pension or they could suffer significant loss close to their retirement.