As pension policy discussions heat up, with the likes of auto-enrolment looming, the SFA went to a conference of pension experts to get the most up to date information on what direction would be best for small businesses.
Maeve Hally and Professor Shane Whelan of UCD presented on an ‘Analysis of the Taxation Supports for Private Pension Provision in Ireland' where they discussed the three tax incentives that exist for pensions: tax relief on contributions, tax relief on investment returns and tax relief when drawing down the pension. The presentation demonstrated the enormous benefit of these reliefs, in particular to earners on the higher rate of income tax but emphasised the disconnect between the value of the reliefs and take up.
Maureen Maloney and Dr. Alma McCarthy of NUIG presented on ‘Keeping it Simple’, discussing how to effectively communicate pension benefits to encourage active investment in pensions. Linda Barry of the SFA questioned how to communicate the benefits of saving to employees. If they perceive automatic deductions as their pay getting smaller, employees may demand that employers compensate them. Effectively communicating the benefits of saving may minimise the exposure to this risk.
Stephen Moore of UCC and Tiago McCarthy of the Department of Employment Affairs and Social Protection presented on their ‘Target Replacement Rate Study’, where they discussed the fundamental goals of pensions – poverty avoidance and earnings replacement – and what it will take to get to that level of pension funding, as well as factors that currently put those near retirement at risk, such as renting instead of owning housing.
Eamon Murphy of Social Justice Ireland discussed ‘Achieving Universal Coverage – options for fairness and sustainability in the Irish Pension System’ where he discussed the benefits of focusing not on private pensions but instead expanding the State pension to be universal as it would cost less and the benefits would be more robust.
A panel of speakers, including Laura Bambrick, ICTU Social Policy Officer; Clare Duffy, Family Carers Policy and Public Affairs Manager; Neil McDonnell, ISME Chief Executive Officer; and a representative of the National Women’s Council, pointed out additional at-risk groups like women whose husbands pensions make them ineligible to receive their own pensions, and carers who cannot reach enough contributions to be eligible for a State pension.
If any of these articles interest you or you would like to read further about any of these subjects, the slides will be made available on www.tcd.ie/business/pprg/
For any additional feedback or questions regarding the conference, please contact Linda Barry at firstname.lastname@example.org