IRELAND - The Irish Association of Pension Funds (IAPF) is expected to warn the government on the potential dangers of introducing a compulsory mandatory pension system in Ireland.
In a speech at the IAPF annual dinner, to be held this evening in Dublin, obtained by GlobalPensions.com, chairman Joe Byrne will question whether employers and employees will be able to cope with the financial burden that will come with compulsion.
He is expected to say: “A pension scheme that an employer is compelled to set up is likely to be modest. Worse still, employers may take any minimum compulsory contributions as the norm resulting in poorer adequacy for the vast majority of workers than the currently employed.
”Individuals are faced, at different stages in their lives, with different and competing demands such as new mortgages, child care and education costs. We [IAPF] suggest that at different life stages workers are better positioned to save for their retirement where there are clear and simple incentives.”
Byrne’s warning comes after the minister for social and family affairs, Seamus Brennan, asked the Pensions Board to “build on the work of the National Pensions Review” which discussed various viable mechanisms including “mandatory and soft mandatory systems.”
The IAPF recently expressed disappointment that the recommendations of the National Pensions Review (NPR) report were not implemented in the recent Finance Bill. Byrne said the government had missed an opportunity to use the “SSIA (Special Savings Incentive Account) window” to address problems such as pensions adequacy and coverage as proposed in the National Pensions Review.
The NPR was designed to address much needed reform within the e62m Irish pensions system, with particular emphasis on improving workforce private pension provision which is currently at around 50%.
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