Mr. Liam Berney:

As the representative body for 45 unions collectively representing the interests of some 800,000 workers in all sectors of the economy on the island, ICTU, would like to thank members of the committee for the invitation to discuss the report of the Commission on Pensions. My colleague, Dr. Laura Bambrick, social policy officer, may join us later but she is currently appearing before the Joint Oireachtas Committee on Enterprise, Trade and Employment.

First, ICTU wishes to acknowledge the work of the commission. It has produced a comprehensive and detailed report that puts forward a wide range of recommendations to share the increasing costs of the State pension between the State, employers, the self-employed, workers and the generations, both current and future. In the brief time I have available for my opening remarks, I will focus on the key challenges in the report’s recommendations and the key improvements on previous pension policy from the perspective of working people.

ICTU has never denied the challenge population ageing presents for the public finances if no action is taken. However, the 2011 Pensions Act put Ireland on course to have the highest pension age in the OECD in 2028, despite the fact that we have a relatively young population. It is now acknowledged that this policy went too far, too fast and forced workers at 65 to sign on, putting them at risk of poverty at the end of their working life. ICTU is pleased the commission has heard and agreed with us on this.

The commission is recommending moving to a European-style, flexible pension age including proposing that the Government gives a right to retire on a full State pension from age 65 to workers who have worked from a young age. ICTU was first to identify the need for, and to urge previous Governments to introduce, provision for early access to the State pension. As my colleague, Mr. Michael Taft, has pointed out, ICTU was the only member of the commission not to support the recommendation to increase the pension age to 67 and 68 for people without sufficient PRSI contributions. However, we acknowledge that recommending that the increase in the qualifying age be delayed and introduced gradually over a longer period is an improvement on the 2011 Act and will bring the increase in the pension age in step with other EU member states.

ICTU is pleased the commission is recommending new legislation to allow, but not compel, workers to remain in their jobs up until at least the pension age. We have long argued that existing soft measures have proved inadequate for many workers who want to stay in their job beyond the retirement age in their employment contract.

On the recommended increases to social insurance contributions, ICTU agrees, along with a range of bodies including the State’s own advisory body, the tax strategy group, that the self-employed contribution should be adjusted up to at least the employer rate. ICTU is also on the record highlighting Ireland as an outlier on employer social insurance contributions. Ireland has the second lowest rate of employer PRSI in the 27 member states. We are disappointed by the commission’s lack of ambition in the size of the increase it recommends for employers.

ICTU supports in principle the need for intergenerational equity to ensure that the costs of maintaining current payment rates are not placed solely on younger workers. However, we are concerned that the recommendation to remove the exemption to pay PRSI on people aged 66 and over could unfairly and disproportionately impact certain groups of pensioners. For example, today’s retired and older pre-1995 civil and public servants have no entitlement to the State pension. Many of these workers rely on a public sector pension that is less than the value of the State pension. They would be liable for a 4% PRSI contribution on their pension income in excess of €100 per week, increasing their risk of poverty. As the Chairman said earlier, it should be everybody's intention to ensure that people do not slide into poverty in retirement. We are calling for the Commission on Taxation and Welfare to be allowed the time and space to consider this recommendation before the Government takes a decision.

ICTU is pleased to see that many of our long-standing policy positions on benchmarking and index-linking pension payment rates, introducing auto-enrolment, ring fencing State pension contributions, issuing regular PRSI contributions statements and easier access for long-term carers are included in the Commission’s recommendations.

ICTU will continue its engagement with union members, members of Government and the Opposition, and the Commission on Taxation and Welfare to ensure the increasing financial costs of the State pension will, as intended by the commission, be shared fairly and equitably. Along with my colleague Mr. Michael Taft, I am happy to answer any questions members may have.