New Irish government pledges action on pension reform
Ireland’s new government has pledged to continue work on a universal second-pillar pension system despite the Fine Gael-led administration’s lack of a majority in Parliament.
Enda Kenny, who won support last week for a second term as Taoiseach, or prime minister, following an inconclusive general election in February, has named Leo Varadkar minister for social protection, succeeding Joan Burton after five years in the role.
Varadkar, a former transport and health minister, told public broadcaster RTÉ on 7 May the introduction of a universal pension system would be one of his priorities while at the Department of Social Protection.
The pledge comes despite the briefest of mentions of pension reform in a draft government programme, outlining the legislative programme of the Fine Gael-led minority government.
The draft programme, leaked to national media outlets last week, categorised pensions as one of several “long-term challenges” facing the country the administration should seek to address.
The programme said the Irish political system remained “too focused on the short term” and failed to accommodate long-term thinking on policy areas including housing, long-term funding of health and education, and pension policy.
It is possible further detail of any pension reform could be contained in ministerial strategy statements, which the programme pledges each department will draft, consulting on its contents with stakeholders and fellow lawmakers.
Despite Fine Gael’s reliance on a grouping of independent parliamentarians to form a minority government, discussions on the rollout of a universal second-pillar pension system may still succeed.
The main opposition party, Fianna Fáil, has agreed to support Kenny’s administration on budget matters, and both Fianna Fáil and Fine Gael pledged to introduce an auto-enrolment-based supplementary pension system in their manifestos ahead of February’s inconclusive election.
Preliminary work on the reform began more than a year ago, when the previous government launched the Universal Retirement Savings Group (URSG) to advise on the design of a new occupational pension system.
The Irish Pensions Authority has separately pledged to publish a document on pension reform by the summer, outlining how the sector could be regulated in future.
Housing and sovereign wealth
The draft programme for government also said the country’s sovereign development fund, the Ireland Strategic Investment Fund (ISIF), would be one of the partners in a new scheme to boost private sector housing construction, working alongside the European Investment Bank and the Central Bank of Ireland to draft the new ‘Help to Build’ programme within the government’s first year.
It added: “We will support the Irish Strategic Investment Fund [sic] to encourage the delivery of housing-related enabling infrastructure in large-scale priority development areas.”
The ISIF has already backed a €500m residential housing venture with KKR, which it hopes will see the development of more than 11,000 new homes.