Burton bringing Cabinet memo on ‘looming pensions problem’

Tánaiste and Minister for Social Protection Joan Burton will bring a memo to Cabinet this morning to deal with what she has described as the State's "looming pensions problem".

Ms Burton will seek approval to proceed with work to develop a “roadmap” to achieve universal pension coverage through a new supplementary saving scheme with a particular focus on low-paid workers.

In a speech last March she expressed “significant concern” that less than 50 per cent of those aged 20 to 69 in employment had pension coverage, “and this number is decreasing”.

This coverage figure reduces further to an estimated 41 per cent of the working population when the private sector is considered in isolation.

Ms Burton proposes the establishment of an inter-departmental group called the Universal Retirement Savings Development Group", chaired by her Department, which would include external experts on international pension reform.

There would also be input from the Revenue Commissioners, National Treasury Management Agency, Central Bank and the Pensions Authority.

In her speech last March, Ms Burton said she was aiming to introduce of a comprehensive occupational pension scheme, which she described as “a MySaver for those without pension coverage”.

However, she stressed the introduction of such an initiative “would be best supported by a more favourable economic environment than is currently the case”.

The Fine Gael/Labour programme for g overnment contained a commitment to "reform the pension system to progressively achieve universal coverage, with particular focus on lower-paid worker".

That commitment was restated in the Statement of Government Priorities 2014 –2016 agreed between Taoiseach Enda Kenny and Ms Burton early last year.

Ms Burton has said the new scheme should increase coverage for those not currently covered and lower the cost of pensions.

She added: “an opt-out approach such as that envisaged by an auto-enrolment scheme, using scale to achieve greater cost efficiencies for members, is a very proactive way in which we can increase supplementary pension coverage”.