Ireland has taken the first step towards reform of its occupational pensions sector with the launch of the National Pensions Policy Initiative.

The publication, on the 13 February, of a 72-page government document setting out possible policy courses marked the start of a national consultation exercise.

The deadline for responses is 30 May this year and a ministerial statement on the outcome of the exercise is expected in the autumn.

Welcoming the initiative, a spokesman for the Irish Congress of Trade Unions said: Coverage of Occupational Pensions is low at 48% and falling, and in many cases that cover is inadequate. Workers who have an atypical pattern of employment, women and the unemployed have virtually no cover at all.” The organisation added that the country faced a stark choice between developing further incentives to extend the current voluntary system or establishing a universal system for those with low cover or no cover at all.

The Irish Business and Employers Confederation (IBEC) also welcomed the report. Caroline Jenkinson, head of IBEC’s Employee Relations Information Service and a member of the Irish Pensions Board will be consulting extensively with members before producing the organisation’s submission, while the Irish Associaton of Pension Funds is waiting to complete its initial consultations before making a response.

The initiative, jointly promoted by the Ministry for Social Welfare and the Irish Pensions Board was launched by Irish Minister for Social Welfare, Proinsias De Rossa. At the launch, he emphasised the need for Ireland to avoid what he called “pensions poverty”.

The beginning of this process means that the Irish government is reviewing pensions provision across the board, having recently instigated an actuarial review to consider the long term implications of state pensions provision while in mid-1996, it established a Commission on Public Service Pensions to examine the currently unfunded pensions arrangements for public servants. It is due to report in 1998.

The Initiative document assesses the present situation in Ireland and briefly considers the systems in Australia, Chile, the Netherlands, the US and UK. It sets out six groups of measures that could be adopted, while stressing that they are not mutually exclusive. These are improvements to the second pillar to extend its reach with possible fiscal incentives, increasing first pillar state provision, introducing (SERPS) as in the UK, introducing mandatory occupational pension coverage, encouraging industry-wide pension schemes, and legislating for personal retirement accounts specifically aimed at those making irregular, smaller contributions.

Ireland, by dint of demographics is in a better position than many of her European partners. As De Rossa said at the launch: “This is not a response to a crisis, but a timely consideration of policy options to ensure that in the longer-term, Ireland will not face the difficulties being faced by other countries at present.”

However he added: “If we fail to prepare now, we could be faced with the so-called pensions time bomb.”

The initiative comes in the wake a report which found that over 50% of Irish workers were not covered by occupational pensions although commentators have suggested that factors such as the large number of smallholdings where traditional family structures may take the place of retirement provision should be taken into account.