Taoiseach: Pension plan changes ‘very long term’

FEARS people nearing retirement age will be forced to work longer before claiming their pensions have been eased by Taoiseach Brian Cowen.

He said recommendations in tomorrow’s National Pensions Framework to raise the retirement age in the public sector are “very long term” measures.

“I think there will be no immediate change in relation to this,” he said.

However, he said pensions had to be sustainable and balance the numbers of people in work with those who had retired.

The framework, when it is published tomorrow, is expected to recommend raising the retirement age towards 70.

This is in line with a proposal in the An Bord Snip Nua report last summer.

The refined proposal will be phased according to workers’ ages, so that young employees will work for longer and older staff will not be forced into unexpected additional service.

The framework will be launched tomorrow by the Taoiseach and Social and Family Affairs Minister Mary Hanafin. Her department remained tight-lipped regarding its reported contents. It will cover all aspects of private and public sector pension policy, which has remained stalled in the Department of Social and Family Affairs since the departure of former minister Seamus Brennan.

Director of policy for the Irish Association of Pension Funds Jerry Moriarty said the move to raise the public sector pension age would not have a direct impact on private sector workers.

But he said these workers would be more worried about other parts expected to be included, such as a standard rate of tax relief for all schemes.

Ms Hanafin has indicated a 30% rate of uniform tax relief for private pension payments remains on the cards.

In response to a question from Labour Deputy Seán Sherlock Ms Hanafin said while she could not pre-empt the framework she reminded him the Programme for Government contained that promise. Mr Moriarty said a standard rate would punish those already paying into pensions in order to entice those unlikely to join schemes.

The IAPF said it would hurt middle income earners the most.

He said other points of interest will be whether the framework includes a mandatory pension requirement for all private sector workers. However, Mr Moriarty welcomed the imminent publication of the document after years of delays.

Máiréad Hayes from the Irish Senior Citizens’ Parliament, said any attempt to raise the pension age of public sector workers by the Government must be gradual.

However, she welcomed the Taoiseach’s assurance that any policy change would not be introduced in the short term.