Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

Yes, in cash terms they do but the reality is that the majority of the 775,000 people to whom we are referring are low to middle-income workers. What we need to do is encourage greater pension coverage, not less, which is why the auto-enrolment scheme is so important. In terms of the support that is being made available for those who are on higher incomes, the average share of income set aside for a pension contribution is in the range of 3% to 6%. That range is in line with the pension contributions that those who are on lower levels of income pay as well.

As the Senator noted, you pay tax when you are receiving your pension, so those who are receiving their pension and who have put a lot in will be paying more tax at the higher rate of income tax. Finally, we have a number of safeguards in place at the moment to try to ensure that undue tax support is not made available to those who are on very high incomes. These include, in particular, the fact that the standard fund threshold is currently set at €2 million. This means that above a certain level of contribution, you do not get an equivalent gain back. There is a safeguard in place to deal with the concern that the Senator has raised.

As she may be aware, an interdepartmental pensions reform and taxation group has been convened and is looking at many different issues in relation to the operation of our supports for private pensions. That group's work informs the work that the Minister for Social Protection, Deputy Humphreys, and I do. We also publish its work. The Senator's recommendation is calling for a report but the Commission on Taxation and Welfare has only this year published an analysis of the very issue to which she refers. For that reason alone, given that a report has been so recently completed, I am not in a position to accept the Senator's recommendation. I acknowledge that she raises important matters but would argue that the cap that is in place on the standard fund threshold and the fact that those in receipt of higher pensions pay a higher rate of tax mean that we have adequate recognition of these issues already built into our tax policy.