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The National Pensions Review

Pensions Forum 2006. The National Pensions Review. Anne Maher Chief Executive The Pensions Board Dublin Castle 5 May 2006. Agenda. Key Messages Policy Options Recommendations. 2. Key Messages. Significant cost increase for Social Welfare pension Good pension provision costs a lot

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The National Pensions Review

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  1. Pensions Forum 2006 The National Pensions Review Anne Maher Chief Executive The Pensions Board Dublin Castle 5 May 2006

  2. Agenda • Key Messages • Policy Options • Recommendations 2

  3. Key Messages • Significant cost increase for Social Welfare pension • Good pension provision costs a lot • National Pensions Policy Initiative targets broadly accepted • Changes need to be made • Should build on existing good base 3

  4. Targets • 50% pre-retirement income replacement • 34% GAIE Social Welfare pensions • 70% over 30s in workplace with supplementary pension coverage 4

  5. Social Welfare Pension • Significant increases in Social Welfare pension cost • Projected cost of Social Welfare pension as % of GNP 5

  6. Policy Options – Social Welfare Pension • Options to sustain Social Welfare pension module • Increase retirement age • PRSI/Taxation increases • Increase payment to NPRF 6

  7. Supplementary Pension • 58.6% of over 30s in the workforce have supplementary pension coverage • 51.5% of the total workforce have supplementary pension coverage • No progress towards adequacy target 7

  8. Policy Options – Supplementary Pension • Enhancements to Voluntary System • Mandatory Pensions 8

  9. Policy Options – Supplementary Pension Enhancements to Voluntary System • All Board recommended immediate enhancements to current system • All Board believe enhancements would achieve improvements • Some believe enhancements would achieve targets 9

  10. Policy Options – Supplementary Pension Mandatory Pension Provision • Considered issue in general rather than design system • Could be summarised as an issue of cost versus certainty • Some Board members believe mandatory should be considered urgently 10

  11. Recommendations for Immediate Implementation • SSIA style tax delivery for PRSAs plus limited access to funds • Higher rate tax for all personal pension contributors • Reduced Standard PRSA regulation • Incentives on SSIA proceeds • Retirees option to defer Social Welfare pension 11

  12. Main Issues Identified for Further Consideration • Progress review in 2008 • Research on women’s coverage • Regular projection of pension costs • Automatic enrolment • Mandatory pension provision • Pensions awareness campaigns • State Retirement support • Funding Standard for DB Schemes • Pension Protection Fund • Long Term Care 12

  13. Process • Report • completed February – October 2005 • presented to Minister in November 2005 • publicly launched in January 2006 • laid before each House of Oireachtas as a statutory report 13

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