Séamus Brennan (Dublin South, Fianna Fail)

As the House will be aware, because of slow progress being made towards our overall targets in the pensions area, in early 2005 I asked the Pensions Board to undertake the national pensions review. This was published in January 2006. In its report on the review, the board reaffirmed the various targets recommended in the original national pensions policy initiative, including a supplementary pensions coverage rate of 70% for those aged 30 years and over. The board also suggested a continuation of the existing system of voluntary supplementary pensions provision with improved incentives for participation.

However, as I said before, no truly voluntary pensions system has delivered the coverage rates for which we are aiming and if we are to achieve our overall targets, we may have to consider more radical approaches. I therefore asked the Pensions Board to explore and report to me in more detail on the general issues surrounding mandatory or quasi-mandatory supplementary systems outlined in its report on the national pensions review.

I published this second report, with the consent of the Government, last August. The report is a technical examination of the practical issues associated with a mandatory supplementary pension system. It is not a recommendation by the board for or against the introduction of a mandatory system. The board has, instead, examined several options and concluded by giving an outline of what such an arrangement could look like.

The model put forward by the board for consideration is aimed at low to middle earners which entails mandatory contributions of 15%, shared between employers, employees and the Exchequer, on earnings between €15,000 and €60,000. This would be backed up by an improved social welfare pension, which would increase from a current level of 33% of gross average industrial earnings to 40%. A timescale of ten years was suggested for full implementation if this model was approved.

The two reports developed by the Pensions Board over the past year require serious debate and analysis before we decide finally on the type of retirement provision we want for our older people and the contribution we will make during our working lives to that future.

In this regard, pensions featured very strongly in the negotiations on the new social partnership agreement, Towards 2016, and the final agreement features a number of commitments in this area. As part of the agreement, the Government is committed to publishing a Green Paper on pensions policy outlining the major policy choices and challenges in this area and taking account of the views of the social partners.

The two reports completed by the Pensions Board will input greatly to the Green Paper, as will the views from the partnership talks and the National Pensions Forum. A group of senior officials in my Department have already begun work on the Green Paper and it is my intention to produce it over the coming months.

There will then be a consultation process after which the Government is committed to developing a framework for comprehensively addressing the pensions agenda in the long term.

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