IRELAND - Ireland's Personal Retirement Savings Accounts (PSRAs), will have to be made compulsory if Ireland is to address its ageing population, according to the Irish Association of Pension Funds (IAPF).
Speaking at last week’s EFRP/NAPF International Conference in Brussels, John Feeley, chairman of the IAPF, said “In my view, compulsion is going to happen.” However, the IAPF asserted that it was “dead against” the move on tax grounds.
Introduced earlier this year, stakeholder-type PRSAs were intended as low-cost popular pensions products.
On the surface, the impact of an ageing population is not so marked for Ireland. The country has a population of 3.84m with a median age of 32.3 years, compared with the UK (38.2 yrs), and Germany (40.1 yrs).
Feeley acknowledged that by being 10 years “behind”, Ireland is certainly in a position to benefit from the lessons of other countries on how to tackle the problem.
However, the situation is not “a very positive story really”, he added. Net costs around state pensions are set to nearly double to 8% GNP by 2056. A 1995 ESRI study also showed that so far 46% of workers were covered by occupational pensions, with small-company workers, women and part-time staff being the major losers.
Feeley said that the figures showed that there was “still significant room to drive people into occupational pensions.”
By Madhu Kalia
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