Dr. Laura Bambrick:

The position of the Irish Congress of Trade Unions is that it should be 30 years and its reason for that is based on practicality. Social insurance coverage was very late coming to Ireland because we did not industrialise until the 1970s. While we had the requirement to pay social insurance from the mid-1960s, very few people in Ireland were working in insurable employment. People who are coming into pension age will find it very difficult to have 40 years of contributions. If one was self-employed, one did not need to pay a contribution until 1991. If a self-employed person is due to retire next year in 2020, it is not possible for the person to have 40 years of contributions. If one was working part-time, one only had to pay a social insurance contribution from 1988. Some civil servants have not been required to pay the full social insurance contribution, so we cannot introduce a standard of 40 years of contributions when people who were in full-time or part-time employment were not required by the law of the land at the time to make a social insurance contribution. Forty years is just not practical. There are other reasons, such as the Senator suggested not giving people enough of a lead-in time, but that for us is the ultimate reason. It is just too difficult for people to reach that goal. It is unrealistic. We have seen the difficulties the 2012 pensioners had but that will be small fry if we introduce a 40-year target in January of next year. We would say that the qualifying age will be the bigger problem for people as the age of eligibility is being pushed out.

When making our submission to the Government on auto-enrolment, it was a concern and is a concern of ICTU that auto-enrolment will cause displacement with current occupational pensions. For some pension schemes, where the contribution is less that the 6% employer contribution, that would be fine and it will bring people up. Our fear would be that the recommended contribution would become a ceiling and not a floor, that employers would reduce their contribution down to the proposed 6% of salary, if that is what it is going to be. Auto-enrolment would displace existing pensions by employers moving over or reducing the level of contribution if it is above the minimum. Another possible fear is that auto-enrolment will displace current good occupational pensions and that these occupational pension schemes will be closed to new members and new members will be auto-enrolled into the State pension and existing workers would remain in the occupational scheme. In our submission to Government on auto-enrolment, we ask that this area will be examined within the first year and in time after that to see if there is a displacement and if there is, that we will look towards the good practice Senator Higgins mentioned.

Timelines were mentioned. We think it is really good, regardless of what they will be, that timelines will be introduced because the current legislation as it exists is that an employer can wake up on a morning and decide it no longer wishes to contribute to a DB scheme, which mostly has the effect of triggering the winding down of that scheme. As there currently exists no timeline, the fear is that if employers see this legislation or other legislation gathering speed, it will accelerate the closure of those schemes.

They can already do that and this is the current legislation gap. Timelines are really important and sponsoring employers are required to come up with a plan in a timely manner to engage. There is room for negotiation on what those timelines should be but the inclusion of timelines is something we support.