Brian Cowen (Laois-Offaly, Fianna Fail)

This recommendation is concerned with contributions to occupational pension schemes by those on lower incomes. It seeks a tax credit to be contributed by the Exchequer to the individual's pension scheme equivalent to relief at the higher rate of tax of 42%. I take it this tax credit is to be instead of relief that the individual may be getting at the standard rate, assuming they are in the tax net.

A proposal similar to the one in the recommendation was made in the recently published national pensions review. The Bill provides for a once-off incentive for those lower paid with SSIAs, who are in the savings habit, to invest their SSIAs in pensions. Further work is ongoing.

The question of pension provision in the longer term is a separate one. The national pensions review produced by the Pensions Board provides a good base for the consideration the Government is giving to the overall pension situation but that consideration is a work in progress. Referring to the review, the chief of the Pensions Board stated:

Detailed analysis and costing of the pension situation are at least as important as the recommendations and should continue to be used as a frame of reference going forward. The Board understands that further decisions must be made in the context of employment interests, competitiveness and overall economic and social considerations....

The Pensions Board, therefore, acknowledges that its analysis and recommendations must be considered by the Government in a wider context. The Government has taken no position on any of the recommendations in the report at this stage, pending that continuing work.

The wider policy issues raised by the Pensions Board will require further and ongoing examination by the Government. Decisions about pensions are far-reaching, long term and go to the heart of our tax structure. I presume Senators will want the Government to complete the necessary analysis before proceeding. While this recommendation is also in the Pensions Board review, which was published before Christmas, it is the subject of continuing further analysis and consideration. I am not prepared to accept the recommendation until that work is complete.