The Irish Independent reports that up to one million workers with no pension face the prospect of being forced to take one out for the first time.
The Irish Independent has also learned a key report recommends that the contributions for these pensions should be double the original plan.
Workers, employers and the State should contribute 15pc of salary to the new scheme, it says.
The report commissioned by Social Protection Minister Joan Burton recommends that most of the one million workers with no pensions should be signed up for a private scheme and given no option to leave it. The study -- from Paris-based international think-tank, the Organisation for Economic Co-operation and Development (OECD) -- says the most "effective and least costly" way to deal with the mounting pensions crisis is to force cash-strapped workers to put aside some of their wages to fund their retirement.
At present, six out of every 10 private-sector staff have no work-based pension -- and rely on the state- contributory pension when they retire.
With the number of pensioners set to explode over the next three decades, the taxpayer can no longer afford to keep state pensions at the current level.
This means workers will have to boost their own pensions at a time when they can least afford to do it.
The move will be seen as a tax on middle-income workers who cannot afford to put their own pension arrangements in place.
And employers are likely to baulk at having to stump up money to provide pensions for staff, particularly smaller firms.
OECD officials were commissioned by the Government to tell them how to tackle the country's pensions time-bomb.
Although the Government has yet to make a formal decision on the timeframe and structure for the new scheme, it will be difficult for it to go against the advice of the prestigious think-tank.
The report states that compulsory private pensions are "the least costly and the most effective approach to increasing private-pension coverage".
Ms Burton is known to be in favour of some form of private pensions arrangements for the more than half of the workforce who will only have the state pension when they retire.
She has spoken of a system where those who have no private pension are automatically enrolled in one, but can then choose to opt out.
Up to now, the expectation was that contribution levels would be around 8pc, with workers, the State and employers all making contributions.
However, the OECD is set to recommend that middle-income people over the age of 22, without a private pension, should be automatically enrolled and given no opportunity to opt out.
It says lower-paid people will not have to take up the scheme as they will already qualify for the state contributory pension and the level of their earnings means they would not gain much from having an additional private pension.
Not allowing middle-income earners to opt out is likely to be hugely controversial as many of those in middle-income jobs in the private sector are already struggling to make ends meet.
The OECD is recommending that the level of contributions into the new auto-enrolment system should be double what had previously been outlined in government proposals.
The state pension, which is around ¿230 a week for those who have paid sufficient pay-related social insurance (PRSI), is not seen as adequate for a comfortable retirement. Most workers pay 4pc in PRSI.
There is also concern that just one-eighth of the population is aged over 65 at the moment, but up to a quarter of the population will be over that age by 2050.
The Irish auto-enrolment scheme had been due to come in next year. At Christmas, Ms Burton said she was pressing ahead with the plan, but stressed that it would not be introduced until the economy improves.
She said recently that auto-enrolment would be particularly beneficial for people on low and middle incomes. It would also help those moving in and out of different jobs, who had very little opportunity to save for a traditional pension with their employer.
"With an auto-enrolment scheme, they would be paying a fixed amount relative to their income and the Government would also contribute to that," she said.
"That would mean that by the time they retire, they could look forward to a decent level of pension -- the contributory social welfare-based retirement pension but also an additional amount of savings, which would give them a bigger income in their retirement."
The State first launched a plan for an auto-enrolment pensions as part of the National Pensions Framework in 2010.
The OECD also recommends that workers in defined-benefit schemes should get more of the assets when the plans are wound up. At the moment, pensioners have first call.
OECD official Paulo Antolin consulted widely with people with an interest in pensions in drawing up the report, which will be launched on Monday by Ms Burton and the OECD.
A spokesman for Ms Burton's office had no comment.
The Irish Independent also reports that deposits held by Irish banks covered by the state guarantee rose fractionally last month, despite the fallout from the controversial Cypriot bailout.
Allied Irish Banks Group, Permanent TSB and Bank of Ireland saw deposits increase by 0.6pc during the month to €155.6bn.
This was mainly due to strong retail deposits.
The guarantee on deposits above €100,000 expired at the end of March. The Department of Finance said its end had no impact on deposits.
Wealthy depositors and senior bondholders took a hit under the the Cypriot bailout, sparking fears that money could be pulled out of banks elsewhere in the eurozone.
However, the figures released by the Department of Finance confirm the bailout had no impact here.
While headline deposits increased during March, the weakening of sterling against the euro continues to affect deposit values. About 53pc of the movement in UK deposit values since December is attributable to unfavourable exchange movements.
Meanwhile, the reliance on European Central Bank (ECB) funding by the banks dropped 10pc during the month. Year-on-year borrowing from the ECB was down about €25.8bn, or 39pc, to €39.6bn last month.
"The steady decline in reliance on ECB funding reflects the continued strengthening of the banking system," the Department of Finance said.
The Irish Times reports that
a new insolvency service is to be launched in Dublin today and individuals with
children going to private schools and availaing of luxuries such as a second car
and satellite television may have to give them up if they seek to enter an
official insolvency arrangement to settle the debt.
As the newly established Insolvency Service of
Ireland prepares to accept insolvency applications from June, it is anticipated
in political circles that the first settlements could be finalised by September
or October. Such settlements will be subject to the agreement of banks and other
One of the cornerstones of the package is the
release of official guidelines on a “reasonable standard of living” for
insolvent debtors and “reasonable living expenses”. These are expected to prove
contentious given the expenditure limits they will impose on insolvent debtors.
A key part of her role is to introduce new
technologies to enhance customer service and drive efficiencies for the bank. On
Monday, AIB opened a digital concept outlet at the Dundrum Town Centre that will
trial a number of IT customer service initiatives that could be rolled out in
branches over time.
The Irish Examiner reports that the proposed EU-US Transatlantic Trade and Investment Partnership free trade agreement could boost the economy by €800m per annum in increased GDP, and help create 4,000 jobs.And one in five companies believe the proposed partnership will result in job creation at their firms, an Ibec member survey has found.
US and EU business leaders meet in Dublin Castle today, in parallel to a meeting of EU trade ministers, in an effort to advance talks towards a major new transatlantic trade deal.
The EU trade ministers meetings will be crucial in determining the likely parameters of a new partnership free trade agreement which has the potential to provide a major economic boost to both the Irish and global economies.
Minister for Jobs, Enterprise and Innovation Richard Bruton said assessments made by the EU Commission and other European bodies, a comprehensive trade and investment partnership could over time boost EU GDP by 0.5% per annum and help create some 400,000 jobs in the EU.
“Based on those assessments, if Ireland simply benefited in proportion to the size of our economy, a comprehensive trade and investment partnership could over time provide gains to Ireland in the order of €800m per annum in increased GDP, and 4,000 new jobs,” the minister said.
A new survey of Ibec members highlights the enormous benefit to jobs and investment that a trade deal could have for Ireland.
52% of companies said a deal would lead to increased trade with the US, 20% said a new trade deal would increase investment in their company and 19% of companies indicated that a deal would lead to job creation in their firm.
Of those companies that currently export to the US, over half (51%) said a deal would increase the value of these exports. 142 companies took part in the survey, large and small, from a cross-section of sectors, including companies that export and those that do not at present.
The Dublin Castle discussions are being chaired by president and CEO of the US Chamber of Commerce, Tom Donohue, and president of BusinessEurope, Jurgen Thumann, and will be attended by Minister Bruton, European Commissioner for Trade Karel De Gucht, the leaders of European business federations and senior European and Irish business figures.
Ibec chief executive Danny McCoy said: “A transatlantic trade deal has the potential to kick-start new phase of economic renewal on both sides of the Atlantic. Together the EU and US have a combined population of €800m people, almost half the world’s GDP and a third of world trade. A deal would constitute the most important bilateral trade initiative ever negotiated and, as a trading nation with strong US ties, Ireland is particularly well-placed to benefit.
“The US is already one of our key export markets, a new trade deal has the potential to significantly increase the value and volume of these exports. The potential for job creation, new investment and economic growth is enormous. Businesses would benefit from new opportunities, lower costs, a reduced regulatory burden and new public procurement opportunities. It is vital that this opportunity is seized during the Irish EU presidency.”
Check out our subscription service, Finfacts Premium , at a low annual charge of €25 - - if you are a regular user of Finfacts, 50 euro cent a week is hardly a huge ask to support the service.
© Copyright 2011 by Finfacts.com