Date Released: 14 August 2016
SIPTU General President, Jack O’Connor, has described the Report of the Interdepartmental Group on Fuller Working Lives as “a useless piece of window dressing” which fails to deal with the key aspects of the developing crisis involving retirement and pension provision in Ireland.
Commenting on the report, published on Friday (12th August), O’Connor said: “This report simply repeats what is already well known and lists a few innocuous recommendations that will contribute nothing to resolving the problems confronting the future provision of adequate pensions for retirees. Unfortunately, it merely amounts to a useless exercise in window dressing.
“It completely fails to address the plight of older workers approaching mandatory retirement age who have been left high and dry by the abolition of the Transitional Pension without any period of advance notice to allow them to try to accumulate some savings to cushion the resulting financial shortfall. SIPTU has repeatedly called for an increase in job seekers benefit at 65 as a temporary measure to deal with this problem. Such a provision would cost as little as €5 million a year to cover those forced to retire at 65 and just €25 million for all 65 year olds who are dependent on the Social Welfare system.
“However, the long term solution involves the abolition of the mandatory retirement age to allow those wishing to work on, to do so, while still making provision for people in hazardous and heavy manual occupations to retire at 65.”
He added: “This useless report also ignores the elephant in the room which is the requirement for the introduction of a mandatory second pillar pension scheme for all workers who are not already in proper occupational schemes. Ireland is virtually unique in the developed world for the absence of such a scheme, which would require mandatory contributions by employers, government and employees. Instead of abolishing the Universal Social Charge, we should be redeploying it in this direction.
“The increase in the qualifying age for the State Old Age Pension to 67 should be deferred to 2028, to allow for new second pillar arrangements to become effective. The proposed increase in the qualifying age for old age pension to 68 in 2028 should be deferred until this becomes the norm in Eurozone countries.”
O’Connor continued: “The report also fails to address the implications of the impact of the collapse of sovereign bond yields on occupational pension schemes. We are now in the absurd situation that several perfectly viable schemes involving tens of thousands of members may be unable to meet the regulatory Minimum Funding Standard. This will result in catastrophic losses for the workers affected if these schemes are, quite unnecessarily, forced to close.
“There is a major crisis unfolding in the retirement and pensions arena. If it isn't tackled, it will ultimately rank second only to the banking crisis of 2008 in terms of severity and economic implications. We deserve more from our elected legislators than the kind of hand wringing that is displayed in this useless report.”