Questions about the universal pension

The Minister for Social Protection, Joan Burton, indicated that, now they economy is recovering, she is looking at implementing a universal pension scheme. Only half the population have private pension schemes and approximately 17,000 additional people receive the old age pension each year. Ahead of starting a universal pension scheme, there are a few questions to be answered

1. If the State want to reduce the pressure on State pensions in the future, why did they spend the remainder of the National Pension Reserve fund?
2. We hear about defined benefit pension schemes being in deficit all the time. Do the government have a plan to tackle the €440bn deficit in public service pension and the shortfall in the Social Insurance Fund?
3. If the government want to encourage people to contribute to private pensions, why did the Minister for Finance increase the pension levy this year instead of stopping it, as he promised? Is he going to remove it or is the €700m a year just too good to give up?
4. Is the universal pension going to be ring fenced? There is no fund for the State pension with PRSI contributions forming part of general revenues each year.
5. There is talk about reducing the strain on the State old age pension. Do this government envisage replacing it with the self funded universal pension?
6. Who is going to administer the universal fund? The professional fund managers all work in private industry. Are they going to poach these staff? How much will it cost to hire these highly qualified professionals?
7. What are the charges on the universal pension plan?
8. If it is a defined contribution scheme, who is going to advise employers and employees?

There is no doubt that something needs to be done to address the lack of private pension funding in Ireland. However, this current government has given no indication that they want to encourage people to save for retirement. There are lots of questions to be answered before we know they are capable of taking charge of people’s retirement funds.

If you have any questions, please contact me directly at steven@bluewaterfp.ie