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The Minister for Social and Family Affairs Mary Hanafin told a Pensions Conference in Dublin today that almost 50% of workforce and majority of private sector workers in Ireland have no pension.
"Irish people are living much longer than ever before. While this is a very positive result of our increased prosperity and better health, it also presents huge challenges for our pensions system", according to the Minister.
"At present we have almost 6 workers for every person of pension age. By 2060, we will have fewer than two. This huge shift has already started and will put increasing pressure on the State pension system", the Minister told the conference.
"This difficulty is made even more significant by the fact that over 1 million, or nearly half of all workers, do not have a private or occupational pension and may be entirely reliant on the State pension when they retire. Both of these factors mean that action must be taken now to ensure that today's workers will not face a huge pensions gap when they retire", the Minister will told the delegates.
Today's conference marks the end of a public consultation process on the Government's Green Paper on Pensions, which was published last Autumn. It will inform the Government's decisions on the options set out in the Green Paper.
The Green Paper sets out a number of options for the future, which include improved tax incentives for private pensions and compulsory pensions. It sets out the approaches that have been taken in other countries and discusses the pros and cons of
these. The experience of the UK, Australia and New Zealand in particular will be discussed at the conference.
Hanafin expects that the Government will be able to announce a new framework for future pensions policy by the end of 2008.
However, with the end of the Celtic Tiger period, no significant change is expected. Meanwhile, the Minister and all other public sector staff have pensions which entitle them to increases tied to their last position at retirement, including benchmarking increases.
