SSIA holders should continue saving by opening up a pension, Minister for Social Affairs Seamus Brennan said today.
Speaking ahead of National Pensions Action Week, the minister reiterated that almost half of the nation’s two-million workforce had no retirement package.
The Pensions Board is targeting 25-35 year-olds with a national public awareness campaign from March 12-18.
Mr Brennan said: “In the next couple of weeks, €7bn will come out of SSIAs. This is a good time to ask the owners of that €7bn to consider keeping up the savings habit. Put some of it aside in a pension fund.”
Mr Brennan also warned the Government may have to introduce mandatory pensions if workers don’t act voluntarily.
“There is a Green Paper on Pensions due at the end of March. That’s looking at mandatory pensions and quasi-mandatory pensions. We will have to make some tough decisions when that paper is out.”
Pensions Board chief executive Brendan Kennedy said the state pension will only guarantee an income of about €11,000 at retirement.
“Many of us would be used to living on a lot more than that so this is a good way of concentrating your mind,” he added.
Of the two million strong workforce, only 930,000 have pensions, and 500,000 of that total are women.
Research commissioned by the Pensions Board shows that 44% of all adults surveyed think that a pension should be started before the age of 25.
However the latest CSO statistics show that only 27.5% of those under the age of 25 actually have a retirement package.
Currently 61.8% of the adult Irish workforce over the age of 30 have a pension but the Pensions Board wants to increase this to 70%.
Mr Kennedy added: “The key aim of Pensions Action Week is to focus the attention of consumers on the issue of pensions. It is crucially important that people in Ireland start to think about how they will manage in their retirement.
“Four out of every five people who do not have a pension believe that the state pension would not be sufficient if they retire this year, so clearly they need to address this situation.”
Over the next two months the remaining SSIA accounts mature and in excess of 500,000 people will share in the over €7bn payout.
“A very encouraging outcome of the SSIA scheme is that nearly 45% are young first time savers under the age of 40. Continuation of this savings habit post-SSIA could provide a significant boost to pension coverage if these young savers can be directed towards pension take up,” explained Mr Kennedy.
Pensions Action Week will include themed events on each day to target different sectors of the population.
Employers are also urged to hold a pensions information sessions in the workplace.
Other events include SSIA Day, National Pensions Sign Up Day, Women and Pensions Day, International Pensions Day, Young Pensioners Day and Pension Adequacy Day.