A major review of Irish pensions has recommended that workers should be obliged to contribute to pension schemes to fund their retirement.
The OECD Review of the Irish Pension System says that the best options would be either a universal basic pension or a means-tested basic pension.
These schemes would be complemented by mandatory private schemes, or “auto- enrolment” into additional pension schemes.
Over 900,000 workers have no provision for old age other than the State pension.
The OECD also recommends raising the retirement age to reflect the fact that people are living longer.
It calls for means-testing of pension related benefits like free travel and the household package.
The OECD highlights what it calls unequal treatment between public and private sector workers – with Government employees far more likely to enjoy defined benefit or guaranteed pensions.
It recommends that a cheaper public service pension scheme introduced last year for new recruits to the public service should be applied to some serving Government employees in order to secure savings sooner.
The new scheme, based on career averaging, will not deliver savings for decades when this year’s recruits begin to retire.
The OECD also recommends that any new scheme for private sector workers should be extended to the public service, while it urges legislation to improve protection for workers in defined benefit pension schemes in difficulty.
At present retired pensioners get first call on the remaining assets of the scheme, and this can leave scheme members who have not yet retired at a disproportionate loss.
It says the priority for pensioners already receiving their pensions should be eliminated.
The OECD urges caution about investing pension funds in domestic infrastructure projects, adding that supporting economic growth should not be used as an excuse to impose low returns on pension fund members.
It also states that the funding standard for pensions should be revised.
The report found that while Irish pensioners were in a comparatively good position compared to other age groups and international experience, the country’s pension framework faces challenges of sustainability.
However, it points out that there is a “misalignment” between the tax reliefs which incentivise pension saving by high earners, and the policy aim of promoting increased pension coverage for the lower paid.
The OECD also found that charges for small occupational and personal pensions were expensive.
Minister for Social Protection Joan Burton said that her aim was to ensure that all older people have a safe secure retirement, adding that the sooner the system was reformed, the better.
However, she added that she was mindful of the economic crisis, and that would inform her strategy.
Ms Burton said she intends to bring proposals to Cabinet soon.
Dr Lydia Foy, the transgender woman who won a landmark High Court case for gender recognition in 2007, has issued new proceedings against the State as she remains unable to get a birth certificate indicating she is a woman.
“I think it’s beyond belief that the State still hasn’t changed the law,” said Dr Foy at her home in Athy, Co Kildare, yesterday.
“You’d imagine they’d have dived in to fix this up. Not a huge number of people would be affected and it’s a matter of human rights.”
The High Court ruled in October 2007 that Irish law was in breach of the European Convention on Human Rights for refusing to recognise the acquired gender of transgender people.
The State moved to appeal to the Supreme Court but withdrew this in June 2010.
Since then successive Governments have promised to introduce legislation to allow transgender people to get new birth certificates.
Dr Foy was registered as Donal Mark Foy at birth. She married and had two daughters, but struggled with her gender, attempting suicide and spending time in psychiatric care.
She was diagnosed with gender identity disorder by doctors in Britain.
She and her then wife separated in 1991 and she underwent gender realignment surgery in Britain in 1992. She was to lose her job as a dentist as well as access to her daughters following the surgery.
In March 1993 she applied for a new birth certificate reflecting her female identity, was refused and began legal proceedings in 1997.
Though the High Court initially ruled against her in 2002 it made its groundbreaking ruling in her favour five years later.
Ireland is now the only state in Europe still in breach of the Convention on Human Rights on the issue.
Minister for Social Protection, Joan Burton, said on a number of occasions legislation was a “priority”. Last September she promised its publication “within weeks”.
A spokeswoman for the department said the “formal opinion of the Attorney General was received . . . in December 2012 and is currently under consideration”.
The continued refusal by the State to recognise who she is is “very much a source of distress,” says Dr Foy. “It’s a constant insult. I’ve been very alone, very badly treated along the way.”
Winning the recognition that can only come with a birth certificate that accurately reflects who she is has only become more important.
“Losing my family and my job seemed the worst, most important issues in the past. But I see everything flows from your identity. Being accepted for who I am is the most important thing. I would like to see this wrong put right as quickly and with as much dignity as possible.”
via Clerical Whispers.
via Clerical Whispers.
The self-employed pay social insurance contributions at 4 per cent in order to be eligible for their limited entitlements, while employers and employees together pay 14.75 per cent, enabling employees to obtain a greater range of benefits.
Minister for Social Protection Joan Burton will be advised to raise the PRSI contribution of self-employed people by the advisory group on tax and social welfare, with an increase from 4 per cent to 17.3 per cent among the options expected to be presented.
Due to the recession, large numbers of previously self-employed people have attempted to access social welfare supports for the first time only to discover their entitlements are limited compared to those available to people who have been employed by others.
Self-employed people cannot access jobseeker’s benefit and illness cover, although they get the same State contributory pension provisions as employees.
Ms Burton asked the group to explore whether providing social insurance cover for self-employed people was “technically feasible and financially sustainable”. The group based its discussions on an actuarial review of the social insurance fund carried out by KPMG.
The review found that the annual rate of social insurance contribution required from the self-employed to cover the cost of the State contributory pension would be 15 per cent. Close to 16 per cent would be necessary if jobseekers benefit was included with the State contributory pension, while the figure rose to 17.3 per cent if invalidity pension was also factored in.
TENSIONS BETWEEN Fine Gael and Labour over the approach to December’s budget have flared after two prominent Ministers clashed publicly on whether wealthier pensioners should be subject to cutbacks or new taxes.
There were strong hints last night that Ms Burton will resist any moves to target pensioners. “Ms Burton will make her views known to her colleagues in Cabinet in the lead-in to the budget. She greatly values the services her department provides to pensioners,” said a spokeswoman.
Donegal North East Fianna Fáil TD Charlie McConalogue has said it is deeply disappointing that the Minister for Social Protection Joan Burton has failed to rule out any cuts or changes to the free travel scheme.
Deputy McConalogue made the comments as concern grows in Donegal about the future of the scheme.
“The Government has engaged a major review of the free travel pass, a scheme which has enormous value to older people in Donegal and across the country.
THE NEW free financial advice service for mortgage holders in financial distress, unveiled yesterday by Minister for Social Protection Joan Burton has been widely criticised as being too little, too vague and tokenistic.
The new Mortgage Arrears Information and Advice Service offers mortgage holders in serious difficulty advice from an accountant, for which their lender will pay.
The borrower must have already been through a process with their bank and have reached the point where the bank is making long-term proposals about how they may continue with the mortgage.