IRELAND - The Irish minister for social and family affairs, Seamus Brennan, is set to launch his own version of the UK's Pension Commission, Global Pensions can reveal.
A source close to the minister confirmed a decision had been made to create a “two or three person commission” which will look closely into the issue of a mandatory pension scheme for Ireland.
The commission will also be charged with assessing the potential impact of an ageing Irish population on the current pensions system.
A recent Organisation for Economic Co-operation and Development (OECD) report urged the country to encourage greater labour force participation over the age of 50 to protect itself from severe pension funding issues in the future. It is predicted only 29% of the Irish population aged over 65 would be in work by 2050.
With currently less than 50% of the Irish workforce over 30 taking up supplementary pensions and the failure of the Personal Retirement Savings Accounts to grab the public interest – it is believed only 60,000 have been taken up – the government has been forced to retackle the issue of supplementary pension take up.
In a separate interview with Global Pensions minister Brennan accepted the Pensions Board could be suitable for the job but a source later claimed he wished to move away from that possibility because of their “interests” within the pensions industry.
Brennan, who openly admitted his admiration for the Turner Report, said he had not made his mind up on the issue of mandatory pensions, but needed to see the best way to get the Irish population covered.
He said “We are unlikely to go down the full compulsion route. So what I need to do now is flesh out the implications of the soft mandatory, I need to get numbers on how it would work and who would manage it. Would it be through the PRSA system, through the tax system?”
Brennan admitted the opt out system as displayed in the commission’s National Pensions Saving Scheme proposal, “is probably the best way to approach the problem of coverage and sustainability.”
The minister accepted the concept of a mandatory scheme would have a significant impact on the industry but added: “Turner recommended a three-way split between the employer, employee and state.
I was pleased he got the state involved because there are three stake-holders who have an interest in it.”
The minister also said he intended to publish the Pensions Board Review in the third week of January, when, according to our source, he will reveal his intention to launch the commission.
The Pensions and Lifetime Savings Association (PLSA) has revamped the standards for its Pension Quality Mark (PQM) in a bid to raise the quality of single-employer defined contribution schemes.
People approaching retirement are "systematically misjudging" their longevity and undervaluing annuities, the Institute for Fiscal Studies (IFS) says.
Professional Pensions is holding a breakfast briefing on engaging defined contribution (DC) members on 7 February.
Panellists at a PP webinar discuss October's High Court judgment on GMP equalisation, how schemes have responded, what their strategies should be, and how the industry can approach it.