Mr. Justin Moran:

The audit of the Social Insurance Fund is under way. It is hoped to publish it in the third quarter of 2017. It will provide an insight into the funds available not just at present but for the next ten years and the demands which are going to be placed on the Social Insurance Fund. It may not be within the remit of this committee but it would be useful if the Oireachtas were to pay close attention to the audit because it will inform decisions in regard to the State pension over the next five to ten years.

It is very important in that context.

In terms of supports to encourage people to enter into private pensions, one of the interesting points that the Department is considering is a new mandatory second-tier pension universal retirement savings scheme. The Minister for Social Protection intends to publish an action plan for pensions before the end of June. It will set out the pension reforms that he would like to see in the first, second and third tiers. The mandatory pension may be similar to the system that has been introduced in Britain. Certainly, we would have no principled objections to that. We would be a little bit concerned about its potential to undermine the State pension system. We know one of the models that the Department has discussed and considered is a mandatory pension scheme where everybody is required to make a 2% contribution. That means the employee and employer make a 2% contribution and, potentially, the State, whether in the form of a tax break or a direct payment, makes a 2% contribution. That might help build up a private pension pot but a question will arise if one needs to approach the employer or State to get money to support the State pension. The initiative might be more challenging because there is an opportunity cost. The money that could have been used for the option is gone because it is supporting the new proposal.

There is also an issue with who runs the mandatory pension scheme. Is it run by private pension companies? If so, are there fees? What is their profit margin?

In terms of the work that Government can do now, we suggest some sort of private pension incentive that bears in mind the points that I made in response to queries by Deputy Boyd Barrett. Also, the Government could support younger workers to get on board. It would be helpful to provide younger workers with more information and encouragement. It is really important that the Government considers introducing a universal retirement savings scheme. When the Department declares the model, and if that is adapted, then it will be a huge change in Irish pension policy. While it could be a positive and sensible change, we need to ensure that it is introduced in a way that does not undermine the existing State pension.