State ‘should fund our pensions’

THE bulk of Irish people believe the State, not individuals, should fund their pensions, a survey has found.

Just 12% thought they should have to carry the burden of providing for their old age while a massive 88% said pensions should be state funded.

The survey found also that after several years of promotion by the state just 50% of those employed in this economy have a private pension, way below the 70% target.

Carried out by the social think-tank TASC, the findings add weight to the proposals it put forward previously on pension reform.

“Public sentiment is clearly in favour of a state-led rather than market-led system of pension provision,” said TASC director Paula Clancy.

The TASC Behaviour & Attitudes survey demonstrated a groundswell of opinion in favour of a state pension plan for all.

Instead of relying on the increasingly risky system of private pension provision, TASC believes the current social welfare pension – on which most people rely for their retirement income – “should be increased and universalised”, she said. Such a move would reduce the high risk involved in private pension funds, heavily reliant on stock markets that cannot deliver the level of returns needed to give people financial security in their old age, she said.

The think-tank said also that “a mandatory earnings-related social insurance-based second tier pension should be introduced” to supplement the main plan.

Though the survey did not go into specifics of how a new state scheme would be funded when carrying out the survey it found overwhelming support for a state-funded pension plan.

Furthermore it demonstrated beyond doubt that “public opinion is ahead of public policy in this area”, Ms Clancy said.

The tax breaks put in place to encourage private pension take-up “has failed in its own terms”, she said.

Given the current economic climate, and the poor performance of equity-based pension funds over the past number of years, combined with the shrinking income of many workers, it seems likely that coverage rates will continue to stagnate or even decline below the current 50% level, she said.


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