Professor Niamh Moloney:

I thank the Deputy for his question. I will make a few comments and hand on to my colleague, Mr. Kermode. With respect to the chapter on pensions, the framing of the report is that there is an important role for the State to support a sort of foundational level of pension savings and, as the Deputy said, to create incentives for savings. It must be done in an efficient and equitable way. The framing the report sets up for this issue is the critical principle of exempt-exempt-taxed. There are exemptions and you save in but at the point of draw-down, the tax is activated. That theme runs across this report. For example, one of our first recommendations is that it perhaps is not biting in the most efficient way with the tax-free lump sum you draw down at the end from your pension and is currently very high. We recommend a meaningful reduction in that area. We also recommend that the standard fund threshold be reviewed to check that it is working correctly. The report frames this in terms of incentives to save for pensions but there are also big costs coming this way as well on auto-enrolment, for example. The fiscal sustainability of the State must be factored into how we think about pensions. I will now hand over to Mr. Kermode.