Pensions become a top priority for women

In the midst of the free haircare, skincare and chocolate samples on offer at the Woman's World fair at the RDS in Dublin last month, booklets on Personal Retirement Savings Accounts (PRSAs) and Women and Pensions "went like hot cakes" from the Pensions Board's information stall.

For the third year in a row, information officers from the statutory body regulating pension schemes and PRSAs in Ireland set up shop at the expo, adding a little finance to the mix of fashion, food and girly glamour.

"We were delighted by the response," says Ms Mary Hutch, head of information and training for the Pensions Board.

The problem of low pension provision among the female half of the population is a cause for concern for the Pensions Board. A Central Statistics Office (CSO) survey last year revealed that 56 per cent of women are not covered by an occupational pension, compared with 45 per cent of men. Only 31 per cent of self-employed women have a personal pension, compared with nearly 47 per cent of men.

PRSAs, a new style of flexible pension aimed at those on the outside of the occupational pension sphere, are being promoted as one solution. They are particularly suitable for people who take breaks from employment for family or caring reasons, most of whom are women, as well as for people on low incomes and temporary part-time workers, who are again more likely to be female than male.

However, pensions "prophets of doom" are trying to kill off PRSAs, to the detriment of many women, younger workers and others excluded from occupational pension schemes, SIPTU's national equality secretary has warned.

Ms Rosheen Callendar says detractors of the new style of pension are "trying to kill off this fragile baby since before it was even born" because they cannot make enough profit out of the groups at which PRSAs were originally aimed.

Introducing PRSAs "was always going to be difficult", says Ms Callendar. She does not want to issue a blanket condemnation of the insurance industry, but "some of them have been very negative from the start".

PRSAs were designed to expand the number of people with a private, non-social welfare pension, not act as a substitute for existing schemes, Ms Callendar argues. The idea was to "get a new sector on board" by making pensions as flexible and as low cost as possible.

But low cost for consumers, by definition, means low profit for sellers. "It's a nuisance for insurance companies to have to collect the contributions and explain to low-income people how the pensions work," she believes.

Ms Callendar told an Irish Congress of Trade Unions conference last week that her union would not be intimidated by "the knockers and detractors who have no interest in providing decent retirement incomes for low-paid workers and older women - those at greatest risk of poverty in old age - simply because they are not a source of sufficient profit".

SIPTU, Ireland's largest trade union, has already announced it will promote a SIPTU PRSA, provided by Irish Life and New Ireland. "It has taken such a long time to convince women that they need independence," Ms Callendar adds. The overwhelming feeling is that PRSAs are less than ideal, but it may be better to have one than nothing at all.

PRSAs will not generally provide anywhere near as high a benefit as the average final salary occupational pension scheme, but they do offer some choice and flexibility to "atypical workers" such as homemakers. This includes the ability to stop and start contributions at any time, without incurring financial penalty.

In practice, these contribution holidays may last as long as the career break. Full-time homemakers will typically rely on using part of the family income - their partner's earnings - to fund a PRSA in their name. This may not always be feasible.

But PRSAs will have a positive impact on temporary employees, Ms Hutch points out: once they exceed six months' service for one employer, they must be provided with access to a PRSA from September 15th.

The big question is whether employers will put anything into the PRSA pots or simply point employees in the direction of the chosen insurance company, agree to make payroll deductions and then hope the problem will go away. "We will be going all out to convince employers that they must put something in," says Ms Callendar.

Another solution - and one that would probably be better for all employees - is for employers to expand occupational schemes so that they take in everyone with service of at least six months, she says.

Meanwhile, trade unions and women's groups are concerned that women outside the labour force - part of the original target market for PRSAs - are also losing out under the social welfare pensions system.

Women who do not have any benefit from an occupational pension scheme, personal pension or PRSA must rely on their spouse's benefits or State pensions.

However, a new report commissioned by the National Women's Council of Ireland says the State system reinforces inequality by encouraging the idea of women as "adult dependants" rather than individuals entitled to benefits in their own right.

The council is calling for homemakers re-entering the workforce to receive a "re-entry" credit, which would mean more would have enough PRSI credits to secure independent entitlement to a contributory pension.

Qualification for a State contributory pension depends on the average number of PRSI contributions paid from the time a person starts working. Since 1994, homemakers can disregard up to 20 years spent caring for under-12s when calculating their yearly average contributions. The council wants this scheme to be backdated to 1973, with the homemakers' "disregards" turned into "credits" instead.

The report recommends that the qualified adult allowance, formerly known as the adult dependant allowance, be increased to 100 per cent of the non-contributory old-age pension full adult rate and paid directly to eligible women, not their husbands.