IRELAND -The Irish Insurance Federation (IIF) is to submit a pre-budget proposal that will call for the establishment of a personal pension for every child up to the age of 18.
The proposal, which will be handed to the government within a week, would immediately qualify 1.1m children and demands the government deposit e10 a month into each child’s account until adulthood at a cost of e130m per annum.
Sponsors, such as the parent, would be allowed to make additional contributions from NET earnings to the child’s account of between e5 - e50 per month over the same time period (18). For every e5 contributed by sponsors the government will contribute an additional e1 - mirroring the ‘one-for-four’ aspect of the SSIA scheme.
The proposal’s author Niall Doyle (pictured), corporate affairs manager of the IIF, explained that from 18 onwards, the individual has full responsibility for making contributions and will have access to a portion of the fund at least twice before retirement - possibly 25 and 35.
He said: “What it gives you is a 100% private coverage for the new generation coming into the workforce. But what is absolutely paramount for the success of such a proposal is to make pension education compulsory. You think you are going to live forever until you are 35 and then you start to slowly realise your are not.”
There has been broad support for the notion of compulsory education. In a survey completed by the IIF, 91% came back in agreement that it was a good idea.
“You already have the unions, industry and government promoting education and we have also submmitted requests to the department of education and department of finance to make it compulsory.”
Seamus Brennan, minister for social affairs, is already considering automatic enrolment as a possible solution to Ireland’s pension crisis.
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