64% SAY THAT IT SHOULD BE COMPULSORY TO START A PENSION
National Pensions Action Week 2006 commences on Monday 1May
Sunday, 30 April 2006: 64% of respondents in a recent consumer survey conducted by the Pensions Board said that it should be compulsory to start a pension, with 47% saying that they would be willing to pay a higher PRSI rate to provide for compulsory pensions. The research findings were revealed at the start of National Pensions Action Week which kicks off tomorrow during which the Pensions Board is encouraging consumers to take action around pensions.
National Pensions Action Week will involve an intensified advertising and promotional focus on the key age targets of 25 – 39 and will include on-the-street promotional activity, outdoor, ambient and online advertising, national print advertising, regional and national radio and TV advertising.
Anne Maher, Chief Executive of The Pensions Board, explained why the pensions issue is so important. “Ireland will undergo a dramatic change in terms of our population age profile over the next 50 years. At present there are over 4 workers contributing to the support of every pensioner. This will fall to 2.7 in 2026 and to less than 1.5 workers per pensioner by mid century. Clearly this will present serious problems in the future if those without a private pension don’t take action in time.
Anne Maher added “The serious issue facing the country is to find a way of ensuring adequate pension provision. This could be done through the current voluntary private system, which would mean more people contributing and in most cases considerably higher levels of contribution, or the introduction of some form of mandatory pension provision requiring everybody to set money aside for their future. The recent Pensions Board report on the National Pensions Review sets out the options starkly and these are out there for consideration by Government and Social Partnership.”
The survey revealed that 27% of respondents who were SSIA holders said that they would contribute part or all of their SSIA into a pension, up from 10% in 2005. “Its encouraging to see that there is an increase in the number of SSIA holders who said they will be contributing some to their pension but this needs to increase even further. The Government introduced in the 2006 Finance Act, a new pension incentive to encourage those on lower incomes to roll over some or all of their SSIA proceeds into an approved pension product and to continue the savings habit with regular savings into a pension” said Anne Maher.
The pensions research also revealed that 4 out of 5 people surveyed believe that the State Old Age Pension would not meet their needs in retirement. The Pensions Board campaign underway at the moment will try to convince these people that the benefits in starting a pension far outweigh any reasons for not doing so.
Friday 5 May, will see a National Pensions Forum in Dublin Castle to progress the pensions debate. Following the publication of the Board’s National Pensions Review, this forum is being held to elicit the views of the many stakeholders who contribute towards the formulation of pension policy in Ireland. The forum will be chaired by Minister Séamus Brennan and will hear from national and international speakers on pensions reform.
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Head of Information and Training
The Pensions Board
Tel: (01) 6131900
Jackie Gallagher / Mark Leech Q4 PR Tel: (01) 4751444
About the Pensions Board
The Pensions Board is the statutory body set up to regulate occupational pension schemes and PRSAs and to advise the Minister for Social and Family Affairs, and through him, the Government, on overall pension policy development.
National Pensions Action Week
1– 7 May 2006
Each day will have a theme as follows;
• Monday- Launch of the week on Labour day
• Tuesday- Pensions in the Workplace day
• Wednesday- Women and Pensions day
• Thursday- National Pensions Sign Up day
• Friday- Pensions Forum in Dublin Castle
• Saturday- Young Pensioners day
• Sunday- Pension Adequacy day
The Pensions Board Research
The Pensions Board research was conducted with 1,000 respondents in the 20 – 54 age bracket and was conducted by Catalyst. The Pensions Board research also revealed:
• Of the 52% of respondents who have a pension, half indicated that they do not intend to increase contributions in the next two years. 37% said they plan to increase, the remainder are undecided.
• Of the people who don’t contribute to a pension (48%), the main reason for not taking up a pension were:
– Too young yet 20%
– can’t afford it / too expensive 21%
– not interested in pensions 12%
– Husband / wife / children will look after it 6%
– Don’t need one 11%
• Of the 48% who do not have a pension, almost half (46%) indicated that they would be encouraged by the availability of the facility to dip into the pension every ten years.
• Among those who do not have a pension and who do not believe that the State pension is adequate to meet their needs, 38% don’t have a clear plan on how they will finance their retirement, 19% are undecided, 25% said they have savings / investments, 38% plan to start a pension in the next three years
SSIA Related Pension Incentive Tax Credit Scheme
An employee with an income less than €50,000 will be able to pay up to €7,500 out of their SSIA on maturity into a pension and receive up to €2,500 from the State. The amount transferred from the SSIA will also be exempt from the 23% exit tax. Further details are on www.revenue.ie
The information unit at The Pensions Board provides a wide range of pension information booklets, free of charge and can be reached at the LoCall number 1890-65-65-65 and on www.pensionsboard.ie.