Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

The recommendation was put before the Dáil in the form of a proposed amendment. It proposes the preparation of a report on pre-retirement access to all forms of pensions savings in certain unspecified circumstances. The proposal is prompted by the inclusion in section 17 of provisions for limited pre-retirement access to additional voluntary contributions, or AVCs. I made clear in my Budget Statement and during the debate on the issue in the Dáil that the AVC access provisions being introduced in the Bill are restricted and temporary in nature. My intention is not to incentivise pre-retirement access to pensions savings but rather to enable and facilitate access in a limited way without damaging core pension provision. For this reason, AVC draw-downs will be liable to tax at the marginal rate and the provisions will apply only to a percentage of those contributions together with any proportionate investment return made by pension scheme members over and above the regular or compulsory pension contributions under scheme rules. In this way, pre-retirement access does not impact on an individual's core pension savings or entitlements. To provide otherwise would have damaging implications for the individual and the State down the line. The protection of core benefits could not be guaranteed by less restrictive arrangements for pre-retirement access to pensions savings.

As regards the preparation of a report on the matter, I pointed out in the Dáil that at the request of the Government's Economic Management Council, or EMC, an ad hoc group was established in 2012 under the chairmanship of the Department of Social Protection to consider the idea of allowing people to access their pensions savings before pension age to assist them to pay down debt. The ad hoc group presented a detailed report to the EMC in September 2011 which concluded that the principle of pensions savings being locked away until pension age should be maintained. The interdepartmental group on mortgage arrears also examined the issue of early access to pensions and did not recommend such an approach. A copy of the report to the EMC can be sought by Senator MacSharry from the Minister for Social Protection.

In addition, the OECD has carried out an independent review of long-term pensions policy in Ireland on behalf of the Minister for Social Protection. I understand the report on foot of the independent review is being prepared and will cover, inter alia, the issue of pre-retirement access to pensions savings. The report is expected to be finalised shortly and will be presented to the Minister for Social Protection, Deputy Joan Burton, who will decide on appropriate publication arrangements following its consideration by the Government. The developments I have outlined deal adequately with the requirements set out in the Senator's recommendation.

I believe that the developments I have outlined deal adequately with the requirements of the Senator's recommendation.