Róisín Shortall (Dublin North West, Social Democrats)
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591. To ask the Minister for Social Protection if he is in receipt of expert advice regarding the pension age; his plans to increase the pension age further than currently indicated; and if he will make a statement on the matter. [20232/17]

Leo Varadkar (Dublin West, Fine Gael)
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The Pensions Green Paper consultation process commenced in October 2007 and was completed in May 2008. It formed the basis of the National Pension Framework published in 2010. The Framework set out that the State pension age would increase to 66 in 2014, 67 in 2021 and 68 in 2028. This was a response to increasing life expectancy, which has been well documented both in Ireland and internationally, and the requirement to make the pension system sustainable while ensuring the rate of payment is adequate.

More recently, the OECD report on the Review of the Irish Pension System confirmed that the reforms that have been introduced, including these increases in pension age, are necessary if we are to continue to put pension provision on a sustainable footing given increased life expectancy and the increasing cost of pensions into the future. Notably, that report commented that “financial sustainability is not guaranteed unless pension ages are increased beyond current plans in most OECD countries, including Ireland”.

My Department participates in a number of bodies which examine this issue, notably in the context of the European Union, and I am very aware of developments in this area internationally, where most countries recognise that increasing pension age is an important tool in maintaining the adequacy of state pension systems.

The Social Welfare and Pensions Act 2011 provided for the necessary amendments to increase the State pension age as announced in the National Pensions Framework. It provided for an increase in the age for qualification for the State Pension from 66 years to 67 years from 2021, and a further increase to 68 years from 2028. It also discontinued the State Pension (transition) for new claimants with effect from 1 January 2014. It is estimated that the net savings from this measure amount to over €80 million per annum. As the State Pension (transition) could only be paid if the recipient had retired, and given such a criterion does not apply to the State pension (contributory), the abolition of that pension removed a significant disincentive to those who did not wish to retire at State pension age.

In advance of the abolition of the State pension (transition), in 2012 an Interdepartmental Working and Retirement Group convened to discuss the wide range of issues impacting on the labour market participation of older workers, including enterprise issues and employment and equality law issues. This was in order to consider cross departmental policy issues that may support longer working and thereby improve the sustainability and adequacy of the pensions system.

More recently, in January 2016, an Interdepartmental Group on Fuller Working Lives, chaired by the Department of Public Expenditure and Reform, was established specifically to examine the implications arising from prevailing retirement ages. The final report of the Group made a number of recommendations to support working and retirement practices. This included a request to the Workplace Relations Commission to prepare a Code of Practice under Section 42 of the Industrial Relations Act, 1990 to help manage the engagement between employers and employees regarding retirement issues and longer working. The final report, the recommendations of which were accepted by Government in August 2016, is available on the Department of Public Expenditure and Reform’s website.

The forthcoming independent Actuarial Review of the Social Insurance Fund will provide further information regarding future pension costs.

I hope this clarifies the matter for the Deputy.