Older & Bolder Launch Report - "Government must place security and fairness at heart of Pension reform"

Older & Bolder alliance has today (Thursday 1st July) stated that the Government must place security and fairness at the heart of any reform of the pension system.  The alliance made this call at the launch of its  an important new report  “A Secure Pension System for All?”(click here for copy), a collective response from the eight member organisations to the Government’s recently published National Pensions Framework”.

Speaking at the launch, David Begg, General Secretary of Congress, warned that the Government is letting workers ‘sleepwalk’ into old age poverty by a continued over-reliance on private pension provision.  The launch also included a contribution from Margaret O''Leary, one of the many women still living with the legacy of 'the marriage bar'.

Older & Bolder’s Project Director, Patricia Conboy, said that the alliance endorsed the need for pension reform and welcomed the Government’s commitment to the State Pension as the foundation of a reformed system, while emphasising the Older & Bolder view that that pension should be set at a minimum of 40% of Gross Average Industrial Earnings as previously recommended by the Pensions Board. Ms Conboy said that the challenge now is to ensure that the principles underpinning the reform process promote a fair and secure pension system for everyone.

“In this context, while the current debate about pension reform is taking place we believe that it is important that there be no tinkering with the State Pension.  Unfortunately, the recent controversy about possible cuts to the State Pension have only served to pre-empt and cloud the public debate we so badly need on pensions,” Patricia Conboy said.

In relation to the Government proposal that workers should be compulsorily enrolled in private supplementary pension schemes, Older & Bolder says that the Government must offer individuals the option of investing their pension contributions in a public pension scheme that is led, provided, managed and guaranteed by the State.

“It is essential that this public option be provided as it is not acceptable that people should be compelled to hand over their money to private pension companies that have not proven their capacity to deliver.  Indeed, we know from meeting older people around the country that an exclusively private system of supplementary pension provision will not win the confidence of potential contributors. People have personal experience of private pensions that have failed to deliver a secure income in retirement and are very aware of the reality that with losses of 37.5% in 2008, Irish private pensions are the worst performing in the 30 OECD countries.”

Congress General Secretary, David Begg, echoed Older & Bolder’s endorsement of central role of a public pensions system and criticised Government’s over-reliance on the private pensions industry.

“Time and again, the Government was warned by unions, amongst others, that our national pensions system faced crisis and that many working people were effectively sleepwalking into old age poverty.

“However, for ideological reasons, the Government chose to entrust peoples’ future financial security to the whims of the market – and the market failed. The Government has a responsibility to address that failure. And to add insult to injury, the most recent official proposals concerning a National Pensions Framework proposes to press people to hand a portion of their earnings to the same speculators who have already failed so spectacularly – this amounts to a reward for incompetence,” David Begg said.

In addition to its call for strengthening the role of the public pension system, Older & Bolder also highlighted other important concerns which must be addressed if we are to create a fairer and more secure pension system for all.

The National Pensions Framework has chosen not to address what are known as ‘legacy’ issues – shortfalls and anomalies in pension system as it currently stands.   Older and Bolder believe those issues cannot be forgotten and at the launch they highlighted in particular the position of women who do not have pension cover because they were discriminated against under the marriage bar which existed untill 1973, forcing them to leave their employment following marriage and leaving them high and dry in terms of pension protection as a result.

Margaret O'Leary from Wexford, who was forced to give up her job when she got married in 1970, spoke of her own experience of the marriage bar at the launch of the report. "Women who were forced to leave work back then found themselves managing on one person's wage, and they often had to look after older relatives, and there was no carers allowance then…yet when it is time to apply for a pension all they can get is a dependent or non contributory pension. I feel an appalling injustice has been done to these women," said Ms O'Leary.
In their report, Older and Bolder state that the needs of women denied access to a pension because of the marriage bar must be addressed either through a universal pension provision or through a special once-off arrangement.

In relation to the issue of when and how people retire, Older & Bolder favours flexible and individual choice for older people. However, as Patricia Conboy explained “Unfortunately, the proposals set out in the National Pensions Framework militate against choice for older people.  The recommendation of a mandatory increase in the qualifying age for the State Pension by 2014 – a very short lead-in time – and propose no action on mandatory retirement ages which push people out of the workplace at age 65, regardless of their preferences and capabilities”. 

The 'A Fair and Secure Pension for All' report represents an important baseline position which Older & Bolder hope to build on further through the outreach meetings currently taking place accross the country and through their campaigning and policy work in the coming months.