Tom Fleming (Kerry South, Independent)
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Question 3: To ask the Minister for Social Protection whether she has or will consider introducing pension and social welfare entitlement incentives as a means of encouraging persons approaching retirement age to engage in job share arrangements to transition towards retirement and simultaneously provide employment opportunities to facilitate others in remaining in or re-entering the workforce; and if she will make a statement on the matter. [11999/12]

Joan Burton (Dublin West, Labour)
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In the first instance, responsibility for the terms and conditions of employment for public sector workers, including retirement and pension issues, lies with my colleague, the Minister for Public Expenditure and Reform, Deputy Howlin. As the Deputy will be aware, the previous Government introduced a moratorium preventing the recruitment of staff in the public sector except in limited circumstances. This decision was made in the context of the agreement with the troika. Regarding the private sector and occupational pension schemes specifically, the trust deed and-or scheme rules will determine retirement dates. Any change to these provisions would be a matter for the pension scheme trustees and-or the employers.

The public sector already has extensive work sharing and family friendly arrangements for employees, as do some private sector employers, particularly the larger ones. Recent research on intergenerational solidarity by the OECD demonstrates that the rate of employment of younger people has no relationship with the rate of employment of older people. The OECD states: "The idea that public policy can re-shuffle a fixed number of jobs between workers of different ages is simply not true in anything but the very short-term."

Given the agreement with the troika and the current financial environment, it would be difficult to create a new scheme. If we are to deliver on our social contract to those in retirement, we need people to remain in work for as long as possible so that we can deliver the supports necessary on retirement. The challenges facing the pension system are significant.

Additional information not given on the floor of the House.

The population share of those aged 65 years and over is expected to more than double by 2050. People are living longer and healthier lives with average life expectancy set to rise even further in the future, up to 88 years for women and 83.9 years for men. In contrast, the share of the working age population is projected to decline gradually from 68% to 58%. Currently, there are six people of working age for every pensioner and this ratio is expected to decrease to less than 2:1 by mid-century. Therefore, the task of financing increasing pension spending will fall to a diminishing share of the working population. In view of this the introduction of a scheme that encouraged reduced participation in the labour market for older workers would be inconsistent with the interaction of current working age and pensions policy.

In terms of assisting those on the live register to secure employment, my Department operates a range of employment support measures designed to encourage and support social welfare recipients of working age to reduce their dependency on welfare payments. These measures are consistent with efforts being made to encourage and facilitate people to continue to work up to and beyond pension age.

Tom Fleming (Kerry South, Independent)
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I originally put this proposal to the Minister for Jobs, Enterprise and Innovation several months ago but it was rejected. Approximately 450,000 people are out of work and many of them are highly qualified. The emigration rates are abnormal and many of our people will leave the country after passing through the education system.

This scheme would operate on a completely voluntary basis in the public and private sectors and it should not affect the Croke Park agreement or the embargo. It merely facilitates those who wish to share work. I urge the Minister to seriously consider the scheme given that it could take thousands of people off the live register and give them the opportunity to get on the career ladder and develop their skills.

Joan Burton (Dublin West, Labour)
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Deputy Fleming is proposing a form of sharing work, particularly among those who might wish to slow down as they get older. The public service already offers generous facilities in terms of jobsharing and family friendly hours. In the context of our current economic difficulties and the costs that would arise, we will need exit the troika programme before we can go further than that. We will also have to ensure that people contribute over a sufficient period of their working lives to build up pension entitlements. The enormous increase in life expectancy in Ireland means that the population of older people will slowly but surely grow. We have to balance one with the other.

Tom Fleming (Kerry South, Independent)
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I would take the last five years of a person's working life as the timeframe for the scheme. A mechanism can be developed to allow personal pensions to be maintained over this period. Those who start on the career ladder with two or three days of work would not be paying pension contributions because they would be on a fixed contract. There is potential in this scheme for a win-win outcome. As the measure would be cost neutral I ask the Minister to give it serious consideration. I am sure she would be favourably disposed towards it if she examined it closely, even if a bit of tweaking is needed.

Joan Burton (Dublin West, Labour)
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I understand why the Deputy originally contacted the Department of Jobs, Enterprise and Innovation about the scheme. I am aware of job sharing arrangements in other countries but, from the point of view of my Department, we would have to be careful that pension contributions were not diminished. In light of our welcome longevity in life expectancy and the increasing proportion of older people in the population, I have to ensure people contribute enough to their pensions, whether the contributory old pension or private pension schemes. There is merit in considering the scheme but it would have to cover these costs.

The job sharing arrangements available to the public service are fairly generous and certain large private employers offer similar schemes. People usually avail of such schemes because of family commitments but the arrangements are expensive. Later this year we will publish an actuarial review of the cost of the old age pension and perhaps at that point we will investigate the cost of covering a pension for a person who has retired and whether the contributions would be sufficient.