Policy issues concerning Pension

A new report from the Occupational Pensions Stakeholder Group (OPSG) provides an excellent analysis of the gender gap in pensions and provides advice on practices to reduce it. However, a universal state social welfare pension, with entitlement no longer based around labour market connectivity, would be the biggest step towards gender pension equality.

Last week, the Central Statistics Office published the results of its annual Pensions Survey. Much of the reaction suggested that things would be much better if private pension coverage in Ireland was higher than it is. However given its expense, and the way the benefits accrue mainly to the better off, we're not so sure. Here's the counter argument....

Pension-related tax reliefs are an expensive means of subsidising retirement savings for the better off, with little financial benefit to the State. The current system has a very high fiscal cost, yet is currently failing to meet its targets in relation to coverage and income adequacy. In this article, we show that the arguments in favour of continuing this perverse incentive system do not stack up. There is no fiscal benefit to the exchequer in either the short or the long term.

The Irish Pension system is in need of significant reform. Unfortunately policymakers have limited the scope of this reform to introducing Automatic Enrolment and very little else. In any format and by any measure, Auto Enrolment will greatly increase the (already significant) cost to the Exchequer of a private system that is failing to achieve its goals.A forthcoming conference, organised by the Pension Policy Research Group, will look at aspects of Auto Enrolment and the implications for the Irish pension system.