Séamus Brennan (Dublin South, Fianna Fail)

The second review of the social insurance fund, SIF, which is required under section 10 of the Social Welfare Consolidation Act 2005, has recently been completed. The review was undertaken in accordance with the requirement that such reviews be carried out at five-yearly intervals, and the previous review was completed in June 2002. The legislation also requires that the report be laid before the Houses of the Oireachtas within six months of its completion.

The SIF provides insured contributors with pension benefits on retirement as a result of old age or incapacity, in addition to a range of short-term benefits. The fund covers almost all employees and the self-employed in Ireland, although some contributors are only covered for a limited range of benefits. The review examines the financial condition and sustainability of the fund at the end of 2005 when social insurance fund expenditure was €5.6 billion, income to the fund was €6.1 billion and there were some 2.8 million contributors. The aim of the review is to establish the medium and long-term financial position of the social insurance fund.

The review covers the period from 2006 to 2061. A key objective of the review was to consider the adequacy or otherwise of the current contributions to finance social insurance fund benefits. The review investigated the likely impact of different increases in benefit rates and contribution limits. In addition, the effects of adjusting the retirement age are explored and assessed. The report examines the potential financial impact of a number of possible future developments to the social insurance system.

The review was overseen by a steering committee comprising representatives of my Department along with representatives of the Departments of Finance and Enterprise, Trade and Employment. Economic assumptions relating to the period of the review were agreed between the steering committee and the consultants who also engaged an independent economist to assist in this process. Migration projections, based on the projections of the CSO, were developed in a similar fashion.

It is anticipated that the review will play an important role in ongoing consideration of appropriate social insurance contribution rates, payments and possible future subventions to the social insurance fund. I look forward to presenting the report to the Houses of the Oireachtas once the Government has considered its contents.

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