Ireland will only see a “very gradual” rollout of a new supplementary pension system but still hopes to publish detailed proposals on the reform next year, according to minister for Social Protection Joan Burton.
Burton said the current coverage ratio of second-pillar pensions – which has been static at around 50% of the working population since 1995 – needed to improve “significantly” and noted the OECD’s previous recommendation that Ireland introduce either compulsory pension saving or a system of auto-enrolment.
The minister also repeated a pledge, made after she was elected leader of the Labour Party in July, to publish details of a new supplementary scheme in 2015.
Burton has previously referred to the system as MySaver, although she admitted the names Shamrock Saver or Celtic Saver were being used.
Speaking to the parliamentary committee on education and social protection earlier this week, she said there was a need to cultivate a “long-term savings habit” and that the Department for Social Protection (DSP) was currently working on a number of policy options on how to introduce a universal, supplementary scheme.
“I am happy that now in particular, with the recovery taking hold and with the agreement in July, we will be in a position to progress this significantly,” she said.
“In countries that have done this successfully, it took a number of years and was built up over a very gradual period of time.
“This is very much what I envisage happening in the Irish system.”
The gradual approach would be required, according to the minister, because incomes in Ireland post-IMF bailout have been too “tight” to warrant a faster rollout.
Burton has previously said the system’s launch could be linked to a number of economic indicators, but the specific indicators have not been disclosed.
Ireland’s unemployment rate is currently still above 11%.
The introduction of mandatory pension saving was seen as preferable by the OECD, with its report labelling auto-enrolment “second-best”, while the Society of Actuaries in Ireland earlier this year also backed a mandatory pension system.