Clare Daly (Dublin North, Socialist Party)
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Question 321: To ask the Minister for Social Protection if, in view of the freezing of pension funds in Custom House Capital, she will consider the establishment of a State fund in order to allow persons to invest safely for their retirement. [26874/11]

Joan Burton (Dublin West, Labour)
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The overall objective of the Pension system in Ireland is to provide an adequate basic standard of living through direct State supports and to encourage people to make supplementary pension provision so that they may have an adequate income in retirement. The State already provides a funding mechanism to secure a basic income for all contributors through the PRSI system and the payment of the State Pension. In addition the State provides significant supports to encourage people to provide for a supplementary pension income. The cost of this tax relief is in the region of €3bn per annum.

The recently published National Pensions Framework is the Government's plan for future pension reform. It encompasses all aspects of pensions, from social welfare to private occupational pensions and public sector pension reform. Development of the framework was informed by the range of views raised during the comprehensive consultation process which followed publication of the Green Paper on Pensions. The aim of the framework is to deliver security, equity, choice and clarity for the individual, the employer and the State. It also aims to increase pension coverage, particularly among low to middle income groups and to ensure that state support for pensions is equitable and sustainable.

At present only 50% of workers have a private pension, with low levels of coverage among moderate to middle incomes a particular concern. While the State Pension is expected to provide sufficient retirement income for the lowest paid workers, most people will have a significant income gap if they do not have some extra private pension provision. A key element of the framework is the introduction of a new auto-enrolment system which provides a way of overcoming this problem. It is intended that the auto-enrolment scheme will be introduced in 2014 but only if it would be prudent given the economic conditions prevailing at that time.