The first-ever national pensions policy report makes seven key recommendations:
Social Welfare pensions should equal 34 per cent of average industrial earnings. This should be possible over a five to 10-year period at a cost to the Exchequer of less than 0.7 per cent of GNP. From next June, old-age pensions will equal 28.5 per cent of average industrial earnings.
Once the 34 per cent rate is achieved it should be maintained, unless the economy faces severe recession, or very high inflation.
The State should set up a fund immediately to create a £31 billion pension reserve by 2031. This would ensure the 34 per cent rate is maintained when the ageing profile of the Irish population peaks in the years after 2025.
A new, low-cost and easily-accessible occupational pension service should be available for low-income, self-employed workers and for atypical employees outside existing schemes. These Personal Retirement Savings Accounts (PRSAs) would be accessible through employers, banks, trade unions, credit unions and other approved outlets.
Tax regulations should be changed to encourage more people to join occupational pension schemes, i.e., tax relief could be rolled over and allowances made for lump sum payments from workers with irregular incomes.
Employers should be obliged to provide access to PRSAs for all employees, including part-time or casual workers.
If there is inadequate take-up of PRSAs, mandatory contributions from employers and employees should be considered. A comprehensive review of the system should take place within five years to see if mandatory measures are necessary.
