IRELAND - Ireland's biggest union, the Services Industrial Professional and Technical Union (SIPTU), wants the government to set up pension accounts for newborn babies.
The proposal is one of a number of radical pension reforms SIPTU has put forward to overhaul the Irish pension system.
SIPTU national equality secretary Rosheen Callender (pictured) told IPN the union had written to the newly appointed Minister for Finance, Brian Cowen, requesting a meeting and expected to take its reform proposals to him shortly.
The aim of the reforms was to facilitate and encourage earlier contribution, improve pensions-related tax incentives for low-income earners and help close the 10% gap between existing pension coverage and the 70% target, she said.
The baby pension account reform would require the government to raise the universal child support payment, child benefit, to e150 per month and then add 10% for every baby born after January 1, 2005.
“We’re just saying, why wait 20 or 30 years? Why not start from birth and make sure of it,” Callender said.
“At the same time, for every child coming off child benefit, which is usually at the age of 16, 17, 18, for that cohort of children, you set up a similar pension fund with a lump sum which would be equivalent to maybe six months child benefit.
“It would take roughly 17 or 18 years to ensure that everybody has a pension fund of their own for the future.”
Other reform proposals include introducing a basic tax credit so low-income earners benefit from tax relief on pension contribution, raising the old age pension to at least e188 per week and giving incentives to encourage early encashment of SSIAs for pension purposes only, before they mature.
“We’ve got e15bn or more coming into the system in 2006/2007 when the SSIA’s mature,” Callender said.
“If you could even lock in 10 or 20% of that into longer term savings for pensions that would be a huge contribution to the pensions problem.”
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