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ANNE MAHER Chief Executive 21 April 2004 The Pensions Board

INSTITUTE OF EUROPEAN AFFAIRS. IRISH PENSION REFORM. ANNE MAHER Chief Executive 21 April 2004 The Pensions Board . IRISH PENSION REFORM. through National Pensions Policy Initiative (NPPI) 1996-1998 finalised by Pensions Board “Securing Retirement Income” Report to Minister

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ANNE MAHER Chief Executive 21 April 2004 The Pensions Board

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  1. INSTITUTE OF EUROPEAN AFFAIRS IRISH PENSION REFORM ANNE MAHER Chief Executive 21 April 2004 The Pensions Board

  2. IRISH PENSION REFORM • through National Pensions Policy Initiative (NPPI) 1996-1998 • finalised by Pensions Board “Securing Retirement Income” Report to Minister • contained 97 recommendations

  3. MAIN COMPONENTS • increase in State Pension to 34% Average Industrial Earnings (AIE) to avoid poverty and provide replacement income for lower paid • establishment of fund to partially fund future increases in State pension • large range of changes in voluntary private pension system and in particular introduction of • new flexible pensions vehicle called Personal Retirement Savings Accounts (PRSAs) • mandatory employer access to PRSAs • review after 3 years

  4. IMPLEMENTED BY • National Pensions Reserve Fund Act 2000 • Pensions (Amendment) Act 2002

  5. PROGRESS • State pension steadily increasing (now 30 – 31% AIE approximately) • National Pensions Reserve Fund up and running but with difficult investment environment • Almost all recommended changes made to private system including • PRSAs available since Spring 2003 with slow but steady progress • Mandatory employer access in place for 59,000 employers but some still non-compliant

  6. SOME ISSUES • continuing complexity in system • public confidence weakened by equity market problem • slow PRSA progress • excessive regulation? • not as simple as planned • need for full employer co-operation • need for incentive or some form of boost? • National Pensions Reserve Fund • lack of public ‘ownership’ • need to keep to clear investment mandate

  7. IN CONCLUSION • Ireland has • clear agreed plan • reasonable certainty • support of Partnership • less complexity than most • reasonable public trust • Irish model is • well thought of overseas • good base for Pan-European opportunities

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