Once more with feeling on reforming the system

Analysis:Two years after the Government-commissioned National Pensions Review was completed, the Government has effectively decided to go through the whole exercise again, writes Dominic Coyle

As a result, it will now be 2009 at least before the Government introduces concrete measures to address the growing pressure on the pensions front.

As one pensions expert put it yesterday: "The Green Paper covers a great deal of ground, most of which has previously been considered, and poses a number of questions for consultation - and, again, many of these have already been addressed."

Much has been made of the fact that Ireland's demographics mean we have more time in which to develop what Taoiseach Bertie Ahern yesterday termed a new, workable pensions framework, but we may not have as long as we imagine.

Even on the basis of the figures published yesterday, the number of people in the workforce supporting each State pensioner will fall dramatically. Where there were 5.6 workers per person over the age of 65 last year, that figure will drop to 3.3 by 2031.

That means anyone currently under the age of 40 is going to be facing a significantly increased burden to support the current pension system within their working lifetime.

And those projections are considerably more optimistic than figures in the National Pensions Review.

The Government has been talking about addressing the "looming pensions crisis" since the introduction of the National Pensions Policy Initiative in 1996.

There have been some successes - the establishment of the National Pensions Reserve Fund and significant increases in payments to existing State pensioners in recent years.

However, persuading people to make provision for their retirement over and above the State pension has proved a hard sell.

Séamus Brennan, Martin Cullen's predecessor as minister for social and family affairs, was sufficiently alarmed at the lack of progress on this front in February 2005 to bring forward the National Pensions Review.

The Minister received that review in October 2005. Following its publication in January last year, he spoke of the need for a public dialogue - a National Pensions Forum was held in March 2006 - and promised to publish a Green Paper.

That was supposed to arrive ahead of the general election but it was long-fingered as part of the most recent national agreement.

In the meantime, the only recommendations in the National Pensions Review that have been acted on were the placing of a cap on pension contributions - which brought additional revenue into the Exchequer - and a niche measure to encourage those paying little or no income tax to place some of their SSIA savings into a pension.

The debate has been stymied by Mr Brennan's insistence - against the recommendation of the National Pensions Review - that mandatory pension coverage be considered and by the Department of Finance mantra on the need to contain costs.

Nothing to date indicates that the Government is serious in addressing its stated concerns for the long-term future of the pension system.

This Green Paper covers a huge range of issues - everything from the options to increase private pension provision and reform of public sector pensions to the funding standard and a more flexible approach to annuities.

Mr Ahern also made a point yesterday of raising the issue of the retirement age, saying that the modern workplace allows us "to tap into the abilities of our working population in different ways and for longer periods of time".

Longevity is a key issue in any reform of pensions. Tánaiste and Minister for Finance Brian Cowen yesterday noted that, back in 1926, men died at the age of 57 on average - eight years short of the retirement age of 65. Now a man retiring at 65 can expect to live a further 16 years, and women even longer.

But time for talking is running out. Yesterday, Mr Cullen repeatedly fudged the issue of when the Government might act on the outcome of the Green Paper process.

The Minister was right yesterday when he said that people needed to look at a pension as a major personal asset and give it the same attention they would other significant financial decisions.

So does the Government.