Feargal Quinn (Independent) | Oireachtas source

I move recommendation No. 2:

In page 10, between lines 6 and 7, to insert the following:“(b) in section 531AM(1)(b) to insert the following after paragraph (viii)—

“(ix) where an individual is charged to income tax under section 112 in respect of a contribution to a PRSA (within the meaning of Chapter 2A of Part 30) by virtue of section 118(5), the amount of the contribution to the PRSA,”.”.

I welcome the Minister of State to the House. It is widely recognised that pension coverage in Ireland is not at the level that it should be. Currently there are five workers for every pensioner. However, by 2050 the ratio will be somewhere in the region of two workers for every pensioner, and this will put considerable stress on the system. In other words, the system we have now under which workers support people on the State pension will simply not be feasible in 2050. Perhaps 2050 seems a long way away but we really should plan for it at this stage.
Recently I read that 900,000 private-sector workers do not have a pension of any description. We are on the brink of a major pensions crisis and the Government must act. As a first step it should play a far more proactive role in incentivising people to plan for their future pensions needs. Incentivising people to take out a personal retirement savings account is one way in which we can seek to avoid a pensions gap. That gap will get bigger and bigger unless we do something about it.
The purpose of the recommendation is to ensure employer contributions to PRSAs are not subject to the universal social charge. That is the objective. Employer contributions to traditional pensions are not subject to USC, so why should contributions to PRSAs be treated differently? I do not understand why. Basically, it is unfair and furthermore the set-up does not achieve what we should be setting out to achieve.
I am advised that there is strong evidence to show the decline in popularity of PRSAs can be directly linked to the changes introduced in budget 2011, which saw the USC being imposed on employer contributions to PRSAs. When I raised this issue on Second Stage the Minister of State gave a somewhat cryptic response, if he does not mind my saying so.