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Submission 246

May 08

Green Paper Submission

Some years ago I put forward a couple of ideas regarding pensions in Ireland. This was based on the declining birth rate against death rate and an aging population over 65 years.

The benefits to industry and the country by keeping people over 65 at work by using their expertise, knowledge and experience is un-calculable. Also it would take a lot of the financial burden from the existing pension fund and allow it to be better regulated.

(1)

  1. (1) People in certain occupations which does not demand a great deal of physical work could easily work up to 70 years of age. From the age of 65 they could retire any year after that if they felt the work was too strenuous or their health was not up to doing the work.

    As an incentive

  2. They would not have to pay Social Welfare contributions after 65.
  3. The amount of their pension would be included in their tax free allowance from 65 as an incentive.
  4. People with a superannuated pension would be given their lump-sum at 65 and their pension when they retire.
  5. They could also be allowed to build up “A” stamp credits if they needed them to increase their Social Welfare Pension entitlement when they retire.

To use as an example:

It would probably be best to take one firm and use it as a model. FAS has a number of pension schemes and also different types of work force and therefore ideal to see if it was possible for it to work.

(2)

If a scheme was designed where every PAYE worker paid a sum of say €5 per week and this money was invested. The money would be deducted even if they were drawing unemployment benefit. People not on PAYE would be allowed to opt into the scheme.

After five years the interest was paid to those who retired while the capital sum was still being collected. After a certain number of years the interest would not only pay the increase in inflation but would do away with the government’s contribution altogether and give a pension that people would be able to live on comfortably.

Year 1. 2m workers @ €5 = €10m per week 52 weeks = €520m + interest

Year 2. €1040m Capital Sum + Interest

Year 3. €1560m Capital Sum + Interest

Year 4. €2080m Capital Sum + Interest

Year 5. €2600m Capital Sum + Interest

Year 6. €3120m Capital Sum

The interest from this year would be paid out to the people on the pension register. When the interest exceeded the cost of living the additional amount would be taken off the monies paid by the Government.

Eventually the monies paid by the Social Welfare Pensions would be reduced and the people would have a guaranteed pension which would give them a good standard of living.

The capital sum would never be touched. Running expenses would be paid from the interest.

Year 7. €3640m Capital Sum

Year 8. €4160 Capital Sum. And so on

To set up the scheme by using the first weeks money, hire staff, buy equipment and premises required to run a successful organisation. The whole thing would eventually belong to the members. The staff would be totally independent of any influence from Ministers or Government but would be overseen by an all party committee in the Dail which would have no say except as watching brief.

This is not a quick fix, but a long term solution to the problems of people pensions.

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