Increasing volume of workers gear up for retirement
Over 20% of workers took out supplementary pension coverage by third quarter of 2018
Among young workers, pension coverage remained low with just one in six of those aged 20 to 24 holding a pension with 41.5 per cent of workers aged between 25 and 34 reporting having a pension. Photograph: iStock
Workers are increasingly making provision for their pension in retirement although new entrants to the workforce are still slow to get a pension, according to data from the Central Statistics Office (CSO).
In the third quarter of 2018, more than 20 per cent of workers aged between 20 and 69 took out supplementary pension coverage, to complement occupational and personal schemes, compared to just 8.6 per cent in the fourth quarter of 2015.
The CSO pension survey shows that 47.1 per cent of the workforce held an occupational pension from their existing employment or a personal pension to which they are currently contributing. Coverage among women in the third quarter was 47.6 per cent compared to male coverage of 46.7 per cent.
Among young workers, pension coverage remained low with just one in six of those aged 20 to 24 holding a pension with 41.5 per cent of workers aged between 25 and 34 reporting having a pension. Coverage was greatest among workers aged 45 to 54 at 70.9 per cent.
Sectors with the highest pension coverage included public administration and defence with 92.2 per cent of workers holding a pension. Some 85.9 per cent of workers in the financial, insurance and real estate sectors held pensions.
Of those workers with a pension in the period, almost two-thirds had only an occupational pension while 16 per cent had a personal pension with over 20 per cent having both types.
For those employees who didn’t have an occupational pension, more than half said their employer didn’t offer a pension scheme.
The CSO’s survey excludes the State’s social welfare pension. In a statement, the Irish Congress of Trade Unions (ICTU) suggested the figures reaffirm the “already strong case for auto-enrolment”.
In 2018, the Government issued its roadmap for pensions reform proposing to develop and begin implementation of a State-sponsored auto-enrolment scheme by 2022. Such a scheme will see employees automatically enrolled into a pension where they’ll receive contributions both from Government and their employer.
Opening a consultation on the auto-enrolment proposal in October 2018, Minister for Employment Affairs and Social Protection Regina Doherty said: “It is increasingly evident that most Irish workers are not saving enough, or indeed at all, for their retirement years.
“Many people will be faced with a serious reduction in their living standards when they retire – a fall in income they clearly do not want.”
The move towards auto-enrolment “follows international best practice”, the ICTU said.
While the CSO’s data showed a gulf between attitudes of older and younger workers, it also revealed the difference in pension cover between full-time workers and part-time workers. Just 36 per cent of the latter had pension cover while more than 61 per cent of full-time workers had cover.
In a similar vein, 72.6 per cent of workers defined as “professional” had pension cover while just 21.2 per cent of those defined as “elementary” had pension cover.