The National Pensions Review

The National Pensions ReviewThe National Pensions Review

Anne MaherChief Executive

The Pensions BoardDublin Castle5 May 2006

Pensions Forum 2006Pensions Forum 2006

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AgendaAgenda

Key Messages

Policy Options

Recommendations

22

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Key MessagesKey Messages

Significant cost increase for Social Welfare pension

Good pension provision costs a lot

National Pensions Policy Initiative targets broadly accepted

Changes need to be made

Should build on existing good base

33

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TargetsTargets

50% pre-retirement income replacement

34% GAIE Social Welfare pensions

70% over 30s in workplace with supplementary pension coverage

44

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Social Welfare Pension Social Welfare Pension Significant increases in Social Welfare pension cost

Projected cost of Social Welfare pension as % of GNP

55

2006 2016 2026 2036 2046 2056

3.0% 3.7% 4.9% 6.5% 8.7% 10.1%

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Policy Options – Social Welfare Policy Options – Social Welfare PensionPension

Options to sustain Social Welfare pension module

• Increase retirement age

• PRSI/Taxation increases

• Increase payment to NPRF

66

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Supplementary PensionSupplementary Pension

58.6% of over 30s in the workforce have supplementary pension coverage

51.5% of the total workforce have supplementary pension coverage

No progress towards adequacy target

77

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Policy Options – Supplementary Policy Options – Supplementary PensionPension

Enhancements to Voluntary System

Mandatory Pensions

88

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Policy Options – Supplementary Policy Options – Supplementary PensionPension

Enhancements to Voluntary System

All Board recommended immediate enhancements to current system

All Board believe enhancements would achieve improvements

Some believe enhancements would achieve targets

99

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Policy Options – Supplementary Policy Options – Supplementary PensionPension

Mandatory Pension Provision

Considered issue in general rather than design system

Could be summarised as an issue of cost versus certainty

Some Board members believe mandatory should be considered urgently

1010

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Recommendations for Immediate Recommendations for Immediate ImplementationImplementation

SSIA style tax delivery for PRSAs plus limited access to funds

Higher rate tax for all personal pension contributors

Reduced Standard PRSA regulation

Incentives on SSIA proceeds

Retirees option to defer Social Welfare pension

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Main Issues Identified for Further Main Issues Identified for Further ConsiderationConsideration

Progress review in 2008 Research on women’s coverage Regular projection of pension costs Automatic enrolment Mandatory pension provision Pensions awareness campaigns State Retirement support Funding Standard for DB Schemes Pension Protection Fund Long Term Care

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Process Process Report

completed February – October 2005

presented to Minister in November 2005

publicly launched in January 2006

laid before each House of Oireachtas as a statutory report

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