Details of pension fund due ‘shortly’

SOCIAL Protection Minister Joan Burton has said the Government will publish final details of its much anticipated sovereign annuity pension initiative “shortly”.

Initially proposed by the Irish Association of Pension Funds and the Society of Actuaries in Ireland, the relevant legislation for the scheme — whichlifts investment restrictions for Irish-managed pension funds and allows them to invest more in the domestic economy — was passed last December, but the regulations still haven’t been finalised.

Addressing an Irish Life conference on pensions yesterday, Ms Burton said: “This is another area where a lot of work has been done over the past year or so. This work is ongoing, but I expect the final details to be concluded shortly.”

Currently, Irish pension funds hold less than 5% of their assets in Irish Government bonds and usually have little alternative in guaranteeing their payments than to invest in higher-rated German bonds.

Ms Burton also used her appearance at the conference to defend the Government’s pensions stance; despite many believing that Government isn’t doing enough to encourage people to save for their retirement.

“Government does support retirement and pensions planning and we will continue to do that,” she said.

“The future holds a society where people are living longer and that is something to be welcomed. To support this, we need a sustainable, fair and adequate pension system. In order to achieve this, a number of reforms are necessary.”

Ms Burton also defended the pension levy, which came in for stern criticism at yesterday’s event.

“The imposition of the levy is for a relatively short period — four years — and its purpose is to improve the pension environment by providing the means to encourage job creation in those areas of our economy most likely to deliver that employment quickly.”

Ms Burton added the Government is continuing to consider “various options” and “how best to proceed” surrounding the future for private sector pensions; while the new single pension scheme for the public sector will provide “a major opportunity for improvements” there.