Joan Burton (Dublin West, Labour)

I propose to take Questions Nos. 32, 39, 52, 58, 65 and 68 together.

The challenges facing the Irish pension system are significant. There is an important and significant policy background to these changes which is that with increases in life expectancy, more people are living to pension age and living longer in retirement. This has obvious implications for the future costs of State pension provision.

I want to emphasise the fundamental principle that people need to participate in the workforce for longer and they need to contribute more towards their pensions if they are to achieve the income they expect or would like to have in retirement. The population share of those aged 65 and over is expected to more than double between now and 2050, from 11% to 26%. People are also living longer. Spending on public pensions, that is, social welfare pensions and public service occupational pensions, is projected to increase from approximately 5% of GDP in 2008 to almost 15% by 2050.

As announced in the national pensions framework, the State pension age will be increased gradually to 68 years. This will begin in 2014, with the standardisation of the State pension age at 66. The State pension age will be increased to 67 years in 2021 and to 68 in 2028. It is worth noting that until the early 1970s, the qualifying age for a pension was 70 years of age. The legislative changes for this are included in the Social Welfare and Pensions Bill 2011 currently before the Dáil. It also meets commitments Ireland entered into in the EU-IMF programme of financial support for Ireland.

By gradually increasing the qualifying age for State pension, people will be further encouraged to remain in employment beyond 65 years of age. The numbers currently at work drop dramatically at 65 years of age. The quarterly national household survey of 2010 showed that 77.2% % of people aged 45 years to 54 years were at work. This drops to 64.3% for 55 to 64 year olds and to just 8.7% for people aged 65 years or over.

In terms of consultation, the Green Paper on Pensions was published in October 2007 and commenced an extensive consultation process to gather the views of people and organisations on the Irish current pensions system with submissions received from individuals and from organisations. The consultation process continued until the end of May 2008 and a report on the consultation process was published in September 2008. This report and the submissions received can be viewed on the national pensions framework website.

Work then began on developing a framework for pensions which was published in March 2010. Further consultation has taken place on implementation of aspects of the national pensions framework.

I am confident that the consultation process has been an open and inclusive one and that all those who wished to make their views on pensions known have had the opportunity to do so.

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