‘Soft mandatory’ pensions option for review
The Pensions Board Review, published yesterday, was originally intended as a springboard for Government policy to address the fact that almost a million workers have no pension plan in place.
However, Social Affairs Minister Seamus Brennan’s favoured option - a limited form of compulsory pension for everyone - was not considered in any depth by the Pensions Board.
As a result, Mr Brennan has formally asked the board to complete a separate analysis of the so-called “soft mandatory” option, whereby everyone would automatically be entered into a mandatory pension scheme but have the chance to opt out if they so wish.
“There is no reason why we should not fully explore a mandatory or quasi-mandatory system,” he said.
But Pensions Board chief executive Anne Maher told the Irish Examiner yesterday that any report on the “soft mandatory” option would be a “lengthy process”.
Factors contributing to the expected delay include the fact that a new board has just been appointed to the Pensions Board which has not even met yet.
Voicing concern over potential delays, Green Party Finance spokesman Dan Boyle said he would have concerns that the matter would not be decided before the general election.
“If it has to be dealt with by the new board I can’t see any action being taken before the next general election,” he said.
However, in the absence of further advice on the issue, the Government could move ahead with other recommendations, such as a proposed SSIA-type scheme with euro for euro matching payments from the Government.
That possibility, which has been welcomed by Mr Brennan, could accompany any future decision to introduce “soft mandatory” pensions. However, with the Department of Finance promising “tough talking” over the cost of the measure, further delays could also arise.
Asked when a Government decision would be made, Mr Brennan was non-committal. “I’m not going to put a timescale on it. We won’t delay it but I’m not going to say in three week’s time we will do the devil and all with Irish pensions,” he said.
Denying any difference of opinion with Finance Minister Brian Cowen, Mr Brennan said: “We both agree that we must agree to a detailed costing exercise.”
He also promised to put in place a national forum in which all interested parties will contribute to a debate on the proposals put forward in yesterday’s report.
Those proposals include top tax relief on all pension contributions and a mechanism to allow under-45s to withdraw up to 30% of their pension funds.
