IIF highlights pension gap

The Irish Insurance Federation (IIF) wants the incoming Minister for Finance to provide incentives to close a €6 billion annual pension gap in Ireland. It is also seeking a new levy to fund the Health & Safety Authority and a dedicated Garda Traffic Corps.

In its Budget submission yesterday, the federation said Mr Cowen, should waive the tax on SSIAs for people reinvesting at least 50 per cent of the fund into a personal pension. It also suggests lifting the limits on pension contributions attracting tax relief on a one-off basis.

The federation, which represents 47 companies writing 98 per cent of the insurance business in Ireland, also reiterated its call for personal pension accounts for children allied to a school pensions-education drive.

It suggests the Government contribute €10 a month to such accounts at an annual cost of around €130 million. In addition, the Government should contribute €1 for every €5 invested in by a parent or guardian. Funding could come from reallocation of 10 per cent of the National Pension Reserve Fund, the IIF says.

At 18, control would revert to the child who, provided he or she continued to contribute, if working, could withdraw a quarter of the fund at 25 with the balance ringfenced until retirement. Widening access to flexible Approved Retirement Funds rather than more restrictive annuities would also encourage personal pension saving, the IIF submission states.

On motor insurance, the IIF is again urging the removal of a 2 per cent stamp duty on all non-life premiums to be replaced with a 0.5 per cent levy that would raise about €20 million a year to be used only for improved safety through the HSA and a Garda Traffic Corps.