Minister questions pension securityCalls for changes to pension arrangements for staff in the Public Service have been made by a senior Government Minister.
Minister for Transport, Leo Varadkar said Ireland may not be able to afford the cost of generous Public Service pensions in the future, arguing that many private sector workers had no pension provision at all.
Mr Varadkar said the Comptroller and Auditor General had estimated the cost of meeting pension payments to retired Public Service staff over the coming 60 years could be about €116 billion (A$145 billion), a number which was at odds with the rest of the workforce.
“I think pension reform is long overdue,” Mr Varadkar said.
“People in the Public Service have very secure pensions but it is not at all clear that we will be able to fund them in the future.
“So in reality they are not that secure and a lot of people in the private sector have no pensions.”
He made the calls after plans for a new universal pension scheme applying to both public and private workers were unveiled by the Minister for Social Protection, Joan Burton.
Ms Burton said changes would be aimed at ensuring all workers, particularly in the private sector, had adequate pension cover in the future.
She said the scheme would come under the supervision of the National Treasury Management Agency and workers would automatically qualify for the scheme.
Ms Burton said the proposal would be particularly beneficial for people on low and middle incomes who had little opportunity to save for a traditional pension with their employer.
“With an auto-enrolment scheme, they would be paying a fixed amount relative to their income and the Government would also contribute to that,” Ms Burton said.
“At the moment, people have the State contributory old-age pension or the non-contributory pension, but for a lot of people, that’s not sufficient to give them the kind of retirement that they envisage.”
Dublin, 31 December 2012
Edition 344, 15 January 2013