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IFI calls for more pension reform

THE Irish Insurance Federation (IIF) has called on the incoming Government to continue the process of reforming the pension system…

By NIALL O MURCHADHA
Fri Jun 20 1997 - 01:00

THE Irish Insurance Federation (IIF) has called on the incoming Government to continue the process of reforming the pension system begun by its predecessor.

The IIF has also said that voluntary occupational pensions should remain, and not become compulsory.

IIF chief executive, Mr Michael Kemp, speaking at the launch of the IIF's submission to the Minister for Social Welfare and the Pensions Board, stressed that it was crucial that the change of government did not lead to any lessening of the impetus towards pension reform. This was in response to the National Pensions Policy Initiative Consultation Document.

"The launch last October of the National Pensions Policy Initiative has created an important forum for debate on the best way to ensure a more financially secure retirement for Irish workers and their families," said Mr Kemp. "It is vital that this important work is endorsed by the new administration and is in no way diluted."

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The federation also argued that the introduction of compulsory pension contributions elsewhere had led to a drop in the overall level of pension coverage. Mr Kemp said that in places like Australia the introduction of compulsory contributions had not worked in the interest of the workers.

"The introduction of compulsory pension contributions is an unpopular move in business," said Mr Kemp. "Contributions are set at the lowest possible level. In Australia it works out at 4 per cent from employers and 4 per cent from employees, in total 8 per cent."

The IIF submission included a proposal for the introduction of Personal Retirement Accounts. The IIF described them as long term contracts which would primarily be invested in equities. These would cater for the self employed and individuals not covered by employer's pensions schemes.

The submission argued for an increase in the maximum rates of contribution to self employed pensions allowable for tax purposes, and that personal and company pensions should be transferable. The federation also argued that the rules should provide for early retirement in self employed schemes.