Bonuses on pensions contributions for Green Paper

Government bonuses on pensions contributions will be "at the heart" of the forthcoming Green Paper on pensions, Minister for Social and Family Affairs Séamus Brennan said yesterday.

Mr Brennan said there was "general agreement" that people more readily understood the benefit of a matching or top-up credit on pension savings, along the lines of the Government bonus on contributions to Special Savings Incentive Accounts (SSIAs), than they do the current system of tax relief on contributions.

The Minister, speaking at the launch of National Pensions Action Week, again hinted that the Government favours so-called "soft mandatory" pension schemes.

Under these schemes, which already exist in New Zealand and were recommended by the recent Turner report on pensions in the UK, workers are automatically enrolled in a pension scheme when they enter the workforce, but can choose to opt out.

Reform of pensions is not a party political issue and should not be affected by the outcome of the general election, Mr Brennan added. "If we were to go down the route of quasi-mandatory or mandatory pensions, it would need a degree of consensus," he said.

Out of the workforce of two million people - 1.1 million men and 880,000 women - almost 930,000 people are not saving for a pension. Of these, 494,000 are men and 435,000 are women.

Mr Brennan reminded SSIA holders that the Government's offer of a €1 credit for every €3 of matured SSIA funds reinvested in a pension, up to a maximum credit of €2,500, was still open.

The Government's Green Paper on pensions is expected to be published in April. Under the pay deal ratified last September, it was agreed that there would be some action taken on pensions within 12 months.