Minister advised to ban reductions in company pensions

 

The practice of reducing company pensions if retired employees qualify for the social welfare old age pension should be banned, the Minister for Finance has been told.

People on low wages get very little benefit from company pension schemes because of the deduction, the Irish Senior Citizens' Parliament says in a pre-Budget submission.

Almost 60 per cent of people in company pension schemes are affected by the practice, it says. The Minister should make it illegal to deduct the social welfare pension from company pensions.

It warns that an increasing number of company pension schemes do not guarantee any particular level of pension to employees on retirement.

About 70,000 workers are now covered by these "defined contribution schemes" in which companies contribute a fixed amount to the pension fund and the return to the retired employee depends on interest rates, it says.

"If interest rates continue at a low level many will be disappointed with their eventual pension entitlements."

Among other calls in the submission are:

Include older people as social partners along with trade unions, employers and other groups.

Increase substantially old age pensions in the Budget and base pension increases on rises in average industrial earnings.

Give public service pensioners an entitlement to free electricity, free telephone rental and similar schemes without a means test, as is the case for other pensioners.

Give vouchers, which could be used to pay for private transport, instead of free bus and train passes, to people living in areas which have no bus or train service.

Give the medical card to all persons over the age of 66.