Mr. Fergal O'Brien:

I thank the Deputy for his observations and questions. On tax relief, we have identified this as an anomaly in the proposals. We have a significant pensions coverage issue. At the same time, we have an existing model of occupational pensions that is working reasonably well where we have coverage. It is important, therefore, that we do not break that element of the Irish pensions system which is working effectively. We caution strongly against any uncertainty in relation to existing tax treatment. IBEC has seen directly the impact of previous uncertain and volatile tax changes to the pension system, specifically in relation to the pensions levy and the impact that had on trust within what the Deputy rightly described as a long-term public policy and system of contributions. If we break that trust, our entire pensions framework will be under threat.

There is an anomaly, as the Deputy rightly noted. It was our view that all pensions and savings products should be treated equally. We would have preferred to see equal treatment on the basis of the existing tax relief model. We see the merit and simplicity of the one-in-four approach proposed for the State's contribution. We will have to accept the fact that there is an anomaly, but it is important that we do not break that element of the occupational pensions system that is working. In some cases, we will have a model where there will be better supports for individuals within auto-enrolment and we will have a model where there will be worse supports for higher income earners.