SOME of the country’s top earners’ pension fund contributions are 36 times higher than the average contribution for other employees, the Economic and Social Research Institute (ESRI) has revealed.
The ESRI found the difference after it examined the average pension policy for an executive director at a public limited company and that of ordinary employees.
Speaking at a conference on the subject held in Dublin, Prof Gerard Hughes, a senior member of Trinity College’s pensions policy unit, said the discrepancy is damaging ordinary people’s view of pension plans.
According to the expert, the average annual employer pension contribution for executive directors in 2009 was €100,000. This is compared to the average level of €2,700 for ordinary workers in the same companies.
Prof Hughes said that, based on the 2009 accounts for 48 of Ireland’s largest private firms, the average employer pension contribution rate for executive directors is 26%, compared to an average contribution for all other private-sector employees of 7%.
“If the average executive director were to take immediate retirement he or she would have a pension 17 times greater than the income of the average single pensioner living on the state pension. It would be 11 times greater than the income of a single person aged 65 or over who had a private pension and other income in addition to the state pension.”
The figures emerged as IMPACT trade union hit out at what it said was an attempt by judges to block cuts to their lucrative pension payments by seeking to up the cap on tax relief.
At the union’s services and enterprises division biennial conference, an IMPACT spokesperson said the Government must reduce the tax relief ceiling to “realistic salary levels”.
National secretary Matt Staunton insisted nobody earning less than €200,000 a year could reach the current ceiling for tax relief on their pension savings.
He said any move to increase this level would be “utterly unacceptable, particularly at a time when pension provision for most workers, including in the state sector, is at risk”.
Mr Staunton also criticised the Government’s levy on private pension funds, which he said will cause further problems for struggling pension schemes.
He said new guidelines to allow pension funds to “repatriate” money from abroad should be considered to help boost job-creating investment in Ireland.
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