Compulsory Workplace Pensions Will Be Enforced
says Minister For Social Protection
Ireland is one of the only two OECD countries not to enforce any form of mandatory pension schemes in the workplace. This need for tighter pension provisions has recently been identified by the Minister for Social Protection.
The necessity for a sustainable Irish pension system, particularly in the private sector, is evident through statistics released on the over 65 population.:
- Approximately 17,000 additional pensioners are in receipt of the state pension every year.
- There is an estimated 15% increase in the total population within the next 5 years.
- Reportedly less than 50% of private sector have any form of pension provisions.
The new Pensions Council and associated Universal Retirement Savings Group will be established by the Minister. This is a bid to reform such provisions in the workplace and improve overall confidence in the Irish pension system.
Operating on an advisory basis to the Government the group will be tasked with the implementation of a ‘’Universal Pension System’’ to increase pension coverage and the adequacy of pension provision particularly among lower-paid workers in the private sector. Their role will involve outlining the features, types of provision and cost estimates of introducing a universal retirement savings system.
The new Pensions Council will operate as a 12 person advisory panel comprising of industry experts along with representatives from the Pensions Authority and various Government Departments.
Although the group is expected to implement proposals by the end of 2015, no definitive operational date has been discussed for the system itself. We see these measures as a welcome announcement which will not only increase the number of workers with workplace pensions but simplify the Pensions Landscape in Ireland.