Richard Bruton (Dublin North Central, Fine Gael)
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Question 175: To ask the Minister for Social and Family Affairs his views on whether private citizens are saving enough to provide for pension provision; and his further views on whether the target of 50% of working earnings is a standard that can be achieved universally. [29686/07]

Martin Cullen (Waterford, Fianna Fail)
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The National Pensions Policy Initiative, subsequently confirmed in the National Pensions Review, estimated that 70 per cent of people at work, aged 30-65, would need supplementary coverage to meet the agreed aim in the Programme for Government to secure a retirement income from all sources of at least 50% of pre-retirement earnings. At present, 62 per cent of people in this category have pensions. In the recently published Green Paper on Pensions, a range of possible approaches to pensions development, to close this gap, were set out for consideration.

While pension coverage statistics are available from various sources, information on the expected value of supplementary pensions is less well developed. Pension levels depend on the type of coverage (i.e., whether the scheme or pension plan is defined benefit or defined contribution). The National Pensions Review concluded that defined benefit scheme members could be expected to meet the 50 per cent level.

Benefits for defined contribution pensions can be affected by a range of risks, including investment and longevity risks. Contribution levels are a crucial determinant of final pension levels for these schemes. Research provided by CSO for the Green Paper on Pensions puts average contribution rates to Personal Retirement Savings Accounts at 10.5 per cent of income; contribution levels to occupational defined contribution schemes are broadly similar.

There are concerns that this level of contributions is not adequate to meet the aim in the Programme for Government. Furthermore, there are concerns that people without pensions are not making use of other savings approaches to fund their retirement incomes.

A major consultation process in relation to future pensions policy is now underway. Following completion of the consultation process, the Government will develop a framework for future pensions policy.