The National Pensions Review Anne Maher Chief Executive The Pensions Board Dublin Castle 5 May 2006 Pensions Forum 2006

2 Agenda  Key Messages  Policy Options  Recommendations 2

3 Key Messages  Significant cost increase for Social Welfare pension  Good pension provision costs a lot  National Pensions Policy Initiative targets broadly accepted  Changes need to be made  Should build on existing good base 3

4 Targets  50% pre-retirement income replacement  34% GAIE Social Welfare pensions  70% over 30s in workplace with supplementary pension coverage 4

5 Social Welfare Pension  Significant increases in Social Welfare pension cost  Projected cost of Social Welfare pension as % of GNP %3.7%4.9%6.5%8.7%10.1%

6 Policy Options – Social Welfare Pension  Options to sustain Social Welfare pension module Increase retirement age PRSI/Taxation increases Increase payment to NPRF 6

7 Supplementary Pension  58.6% of over 30s in the workforce have supplementary pension coverage  51.5% of the total workforce have supplementary pension coverage  No progress towards adequacy target 7

8 Policy Options – Supplementary Pension  Enhancements to Voluntary System  Mandatory Pensions 8

9 Policy Options – Supplementary Pension Enhancements to Voluntary System  All Board recommended immediate enhancements to current system  All Board believe enhancements would achieve improvements  Some believe enhancements would achieve targets 9

10 Policy Options – Supplementary Pension Mandatory Pension Provision  Considered issue in general rather than design system  Could be summarised as an issue of cost versus certainty  Some Board members believe mandatory should be considered urgently 10

11 Recommendations for Immediate Implementation  SSIA style tax delivery for PRSAs plus limited access to funds  Higher rate tax for all personal pension contributors  Reduced Standard PRSA regulation  Incentives on SSIA proceeds  Retirees option to defer Social Welfare pension 11

12 Main Issues Identified for Further Consideration  Progress review in 2008  Research on women’s coverage  Regular projection of pension costs  Automatic enrolment  Mandatory pension provision  Pensions awareness campaigns  State Retirement support  Funding Standard for DB Schemes  Pension Protection Fund  Long Term Care 12

13 Process  Report  completed February – October 2005  presented to Minister in November 2005  publicly launched in January 2006  laid before each House of Oireachtas as a statutory report 13