Looking to the future
Orlaigh Quinn outlines the role the The Green Paper on Pensions will play in the evolution of Irish pensions policy
The Green Paper on Pensions was launched by the prime minister, the taoiseach, the minister for finance and the minister for social and family affairs on 17 October 2007. It covers the background to the Irish pension system and a broad range of issues and options related to social welfare, occupational, personal and public service pension arrangements.
The pensions issue featured in the negotiations for the latest social partnership agreement, Towards 2016, published in 2006. It included a commitment to publish a green paper to set out the issues and options available in this regard. Towards 2016 is the seventh in a series of agreements between the Irish government and the social partners dating back to 1987 focusing principally on incomes, fiscal, social, economic and competitiveness policies.
The Green Paper was launched following an intensive review of the Irish pension system by a number of government departments and the regulator, the Pensions Board. The departments involved were those of the taoiseach, finance, social and family affairs, and enterprise, trade and employment. The paper sets out for the first time all the issues around pensions in a comprehensive way.
It drew on a number of previous reports including the National Pensions Review and the Special Savings for Retirement Report, both of which were published by the Pensions Board in 2006.
While the Green Paper discusses all of the issues in relation to pensions, it also provides new data and analyses on demographic change, the sustainability of the pensions system and the adequacy of current pension provision. In addition, it contains a new analysis of the cost of tax expenditures, the operation of the annuities market, cost drivers for defined benefit schemes, the funding standard, charges and retirement age.
The publication of the paper comes at a very important time as the serious effects of population ageing will not hit Ireland for another 10 to 15 years. In the decades ahead Ireland will move from the current situation of having almost six people of working age to every person of pension age to one where we have fewer than two by 2061.
Given that any decisions taken will have an effect into the long term for Ireland, it is important to ensure that the potential impacts of any future decisions are fully considered.
The launch of the Green Paper began a public consultation phase, which will remain open until mid-2008, to give as many people as possible an opportunity to share their perspective on the options outlined and to offer other solutions as appropriate. The consultation phase offers all interested parties, individuals and representative organisations an opportunity to make their views known on the future of pensions policy in Ireland.
The government will then develop a framework for comprehensively addressing the pensions agenda over the longer-term by the end of 2008.
The Green Paper and other supporting documentation are available to download from www.pensionsgreenpaper.ie and responses from any interested individuals and organisations are welcome.
Orlaigh Quinn is head of the pensions policy unit at the department of social & family affairs