Wednesday, 4 December 2002
Dáil Eireann Debate
72. Mr. Quinn asked the Minister for Social and Family Affairs the terms and objectives of her campaign to encourage more people to take out occupational pensions, as recently launched; and if she will make a statement on the matter. [24697/02]
75. Ms Shortall asked the Minister for Social and Family Affairs if her attention has been drawn to a recent survey by a company (details supplied) which found that 50% of the workforce lacks a pension; the steps she is taking to reverse this; and if she will make a statement on the matter. [24699/02]
Recent data from the quarterly national household survey, published by the CSO, show that almost 51% of persons at work aged between 20 and 69 have supplementary occupational or personal pensions cover. The company in question used these CSO statistics with their own recently conducted research on attitudes and awareness in relation to pensions. Its research highlights that knowledge and understanding of pensions among those without cover is extremely poor.
The proposed pensions information and awareness campaign is intended to raise awareness among individuals of the need to provide additional pension cover for themselves. The proposed campaign, which will be managed by the Pensions Board, will complement and support other measures which are designed to raise the numbers with supplementary pension cover. The Pensions Board in its report on the national pensions policy initiative estimated that 70% of workers over 30 years require supplementary pension cover if they are to maintain their pre-retirement standard of living. The Government aims to increase private pensions coverage in line with this target.
In this regard, the personal retirement savings account, a low-cost, flexible pensions product, provided for in the Pensions (Amendment) Act, 2002, will be a key instrument of this strategy on foot of the Pensions Board's proposals. The Pensions Board has commenced the approval process for PRSA products and it is expected that the new products will be available to the public early in 2003.
Participation in a PRSA arrangement will not be compulsory for either the employee or the employer but employers will be required to facilitate this for their employees if they do not already provide an occupational pensions scheme. The take up of PRSAs and the position regarding pen sions coverage generally will be monitored and a review of the overall strategy will be undertaken within three years.
Mr. Penrose: Is it not the position that a minority of self-employed people have taken out pensions? Does the Minister agree there is a significant lack of knowledge about pensions among consumers, particularly those who are self-employed? Is she aware that only 1% of those surveyed were knowledgeable about the types of pensions available? Apart from PRSAs, which are a good idea, what steps will the Minister take to promote the benefits of pensions and, in particular, the advantage that accrues from contributing to a pension scheme early? Has she a specific programme in mind to reach the workplace? Will she use IBEC, CIF and various unions to promote a campaign to make sure people are aware of the importance of pensions and the need to contribute at an early age, particularly if they are self-employed? Has the Minister set a target in terms of attracting people to take out flexible pensions that can be transferred from employment to employment, which is important for the self-employed?
Mary Coughlan: I agree with the Deputy that it is disturbing so many people are not aware of the necessity to take out a pension. That is fine when one is 30 but it is different when one is almost 60.
Mary Coughlan: We have introduced the PRSAs. I hope through the evaluation we will establish how coverage can be increased. PRSAs provide a flexible approach and will be a good product. Over the next three years, I will undertake a campaign intermittently to advise people of the necessity to take out an occupational pension and keep additional income provided by this good Government.
Mr. Boyle: Is the Minister aware of the large-scale campaign run by the British Government  to encourage people to take up pensions, which resulted in many people being trapped due to the collapse in the equity market? Should it still be the Government's position to encourage people to adopt occupational pensions in that context?
Mary Coughlan: I am aware of what happened in the UK and that is why we have an excellent Pensions Board, which is in place to regulate and support the industry. It is not envisaged that we will end up in a similar position to the UK. We have learned from its mistakes and they have been addressed.
73. Mr. English asked the Minister for Social and Family Affairs the number of people on retirement pension in each of the years from 1997 to date; the cost of eliminating the income restrictions for persons in receipt of retirement pension, thereby bringing the rules into line with those applicable for the old age pension; and if she will make a statement on the matter. [24736/02]
99. Mr. Hogan asked the Minister for Social and Family Affairs if she will address the anomaly where a person on retirement pension between the ages of 65 and 66 is prevented from earning over ?3,174 from self-employment or over ?38 per week if an employee, if the person is to continue receiving retirement pension up to the qualifying date for an old age pension; her views on whether this regulation unfairly discriminates against a person who has the opportunity to supplement pension income at a time when the person's previous income level is dramatically reduced; and if she will make a statement on the matter. [24735/02]
The number of recipients of retirement pension was 80,300 at end 2001 and has shown a gradual increase from 1997 when some 72,000 people benefited from the scheme. As of September this year 82,278 people were receiving retirement pension. It is estimated that about 3,000 people annually are affected by the retirement condition which applies to the retirement pension. However, in practice only a small number of these cases are refused retirement pension each year as most wait until they are 66 years of age and apply for the old age contributory pension.
The retirement pension was introduced in 1970 and was intended to bridge the gap between retirement at 65 and the pension age for social welfare which at the time was 70 years of age. The qualifying condition for old age contributory pension was subsequently reduced to 66 years of age. In the circumstances, the retirement condition only applies to one year. The estimated cost of removing the retirement condition would be €28 million per annum. There could also be  knock-on costs in other areas of the social welfare system.
Mary Coughlan: The Government is committed as part of the Agreed Programme for Government to removing the requirement to retire at 65 in order to receive a pension. The Government is also committed to examining and seeking to remove other financial disincentives for people of pension age who may want to continue some sort of employment. Progress in this regard will made as soon as possible having regard to the availability of resources and the priority attaching to other elements of the programme.
Mr. Ring: Individuals who have made their contribution to the State and who are living on pre-retirement pensions are sometimes called on by their former employers to do a day's work. Is it fair that they should be penalised in their pensions because they do so? Does that not force people into the black economy? Would it not be better if such individuals, who have paid their dues to the State, were allowed to do a day or two's work when it became available? Is there not a daft system in place? It is time it was changed.
Mary Coughlan: It is not necessary to give up employment. A person can be employed on a part-time basis or self-employed. They can earn up to €38 per week or be self-employed and earn less than €3,174 per annum. It only relates to one year and the programme for Government states we will try to address that anomaly and encourage older people who have made a fabulous contribution to the State to remain in employment.
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