Fergus O'Dowd (Louth, Fine Gael)
Link to this: Individually | In context

Question 27: To ask the Minister for Finance his response to correspondence (details supplied); and if he will make a statement on the matter. [4346/11]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

The correspondence which the Deputy refers to proposes that mortgage holders should be able to access monies invested in their pension funds before the date of maturity in order to meet mortgage repayments on their homes or investment properties. Responsibility for occupational pensions' policy rests with my colleague the Minister for Social Protection. However, as the Deputy will be aware his issue was commented on briefly in the Final Report by the Mortgage Arrears and Personal Debt Group (Group) set up by me to make recommendations for improving supports for homeowners in difficulty with their mortgage repayments. While the Group did not consider in any great detail the issue of accessing pension funds, it did recognize that this is a complex matter with long term implications. Any such measure for example would have tax implications for the individual concerned.

The rationale for giving various tax reliefs to statutory and Revenue-approved pension savings schemes is to encourage and promote savings over the long term in order that individuals will have an adequate replacement income in old age. Any proposal, however well intentioned, that would allow pre-retirement access by individuals to retirement savings could significantly reduce the quantum of pension savings available to those individuals in retirement.

Emerging demographic indicators point to increasing numbers of people living longer and healthier lives with more of their lives spent in retirement than previously. In those circumstances, I think it is important to protect pension savings to ensure an adequate post-retirement income.

Revenue approval of occupational pension schemes is given on the basis, essentially, that benefits may generally only be paid at the point of retirement (usually from age 60) or death, whichever is the earlier. Similar rules apply in the case of personal pensions such as retirement annuity contracts and PRSAs. I have no plans to amend these provisions.

As has been stated on many occasions in this House, it is a priority of the Government to ensure that as far as possible that difficulties in relation to mortgage arrears do not result in legal proceedings for home repossession. I am confident that the support measures been taken by Government, including the Code of Conduct on Mortgage Arrears, the Mortgage Interest Subsidy Scheme and the services provided by MABS, are having a positive effect alongside the recommendations of the Mortgage Arrears and Personal Debt Group which I referred to earlier.