Submission 144
April 2008
Green Paper Submission
Given the strident and well-founded warnings about the looming pensions crisis and the vigorous exhortations to make private provision would it not be a responsible idea for the Government to permit additional voluntary contributions to the Social Welfare Fund rather than steering worried people towards commercial pension providers which had until recently a patchy record and more recently an abysmal one.
The recent success of the SSIA scheme underlines, in my view, the heretofore untapped propensity of the general public to save and provide for the future, provided that the scheme carries a state guarantee.
The practicalities of the scheme could and should be kept as simple as possible and involve a budget announcement each year of the interest rate or coupon rate for voluntary contributions for the following tax year followed by an annual and well publicised “voluntary contribution day”. In good years the budget could also provide for an incentive premium of say one euro for every ten contributed. Obviously the earlier and more frequent contributors would increase their eventual entitlements under the contributory pension scheme to a greater degree.
The increasing expense of a burgeoning demand for Nursing Home Places and care in the home packages would in some degree be ameliorated by people being facilitated in the manner I suggest.
I suggested such a scheme in correspondence with the Department of Finance some years ago but received a negative response, which seemed to presume that I intended that the scheme would involve the National Pension Reserve Fund and would give rise to conflicting short and long term investment strategies on the part of the Fund. It was not my intention that the fund be involved except perhaps to the extent that it could repatriate some of our National Debt each year by substituting the Voluntary Contributions for an equivalent amount of borrowings on the international market.
I trust that the submissions received will be considered by persons with experience across the full spectrum of employment profiles, as I fear that if they are filtered through the prism of the Public Service then it may be that the very real apprehensions of those of us outside the “Gold Standard” may not be fully appreciated.
