People without pensions ‘heading towards the poverty trap’

IRISH people are heading for the poverty trap because they are either not securing a private pension or their employer is not willing to provide sustainable pensions.

That’s the message from the Irish Congress of Trade Unions ahead of its Summit on Pensions, which takes place at the Croke Park Conference Centre tomorrow.

ICTU said the country’s pensions policies are in urgent need of re-evaluation and it has made a number of claims about pension provision.

It argues there is a growing lack of commitment by some employers to provide sustainable pensions.

“In these companies, risks in pension provisions are being transferred to the workers and larger contributions are required from the workers,” it said.

“Also, the lifespan of companies is declining. This decline in the length of life of companies is a threat for some company pensions in the long run.”

According to ICTU, the coverage of private pensions is “languishing” at 52% and there is little prospect of meeting the NPP target of 70% coverage without policy changes.

“In Ireland, 40% of over-65s live in the risk of poverty. That is the second-highest percentage of older people at risk of poverty in the EU. Ireland’s population grew by 2% per annum over the past four years.

“Present assumptions on pensions planning are that the percentage of the working population will decline and the percentage of older people will grow significantly in the future. People are living longer, are more active and healthier than in the past. That brings new challenges and opportunities for pensions policies,” ICTU said.

“The risk of viability of company pension funds is increasing as growing numbers of people are living longer.

“The cost of State pensions is increasing with this long life span.

“Ireland is faced with taking a decision on whether or not to implement a mandatory pension scheme.”

ICTU said the aim of the summit is to identify new policy initiatives and actions that can be taken to ensure the provision of adequate pensions for all, to abolish older people’s poverty, to ensure the viability of workplace pensions and to create equitable pensions strategy for the future.

“The summit will... identify initiatives which will result in the creation of a pensions policy... which will be a leader in... European pensions provision.”

The event will be opened by Social and Family Affairs Minister Seamus Brennan and delegates will hear submissions from representatives of the Pensions Board and the Irish Association of Pensions Funds.

Also addressing delegates will be Monika Queisser, a senior economist in the Organisation for Economic Co-operation and Development (OECD) social policy division.

Poverty trap: the numbers game

According to the Irish Congress of Trade Unions:

* 40% of over-65s live in risk of poverty, the second-highest percentage in the EU.

* Coverage of private pensions is only at 52% — 18% below NPP target.

* The present pensions policy results in higher levels of poverty risk for women.

* Ireland is faced with taking a decision on whether or not to implement a mandatory pension scheme.

* The risks of the viability of company pension funds is increasing as growing numbers of people are living longer.