Mandatory pension not tax - Minister

The Minister for Social and Family Affairs, Séamus Brennan, has dismissed suggestions that a move towards mandatory pensions would be akin to levying a new direct tax on workers.

Speaking on RTÉ's This Week radio programme yesterday, Mr Brennan also said his department was examining a number of options on the pensions issue.

"No it doesn't have to be like that," he said in response to suggestions that mandatory pensions would be a form of direct tax on employers and employees.

"What we're trying to do here is have a national debate about the options facing us. I always find it's significant that the people who are not very enthusiastic about talking about the pensions problem . . . all have pensions themselves."

His comments came days after it emerged that the Department of Finance was not in favour of a mandatory pensions plan drawn up by the Pensions Board at the request of Mr Brennan.

The plan envisaged employers and employees combining to make pension contributions of up to 10 per cent of earnings, with the State also contributing 5 per cent in lieu of tax relief.

The Department of Finance said this could cost as much as €3 billion per year.

Mr Brennan confirmed that his department was looking at a range of possibilities in the pensions area

"In some countries now instead of getting say a pay rise of 4.5 per cent, the workers would maybe take 3 per cent and you put the 1.5 per cent into a pension fund," Mr Brennan said.