Fianna Fáil’s new pension framework criticised

Fianna Fail’s new pension framework, unveiled yesterday, has been met with criticism from opposition parties and social activists.

The overhaul of the state system will increase the pension qualification age over the next 18 years, from the current age of 65 to 68 years of age in 2028. Under the new framework, the government is also introducing a supplementary, publicly run pension scheme for workers not already covered by a private work pension.

Anyone aged over 22 years will be automatically registered for the scheme and will pay extra contributions through their PRSI, which will be matched by their employer and the state.

Mary Hanafin, the Minister for Social and Family Affairs, has insisted that the overhaul is necessary because people are living longer and healthier lives. She said: "It is simply not sustainable that we can afford a pension system based on the current model which allows people to spend almost as long in retirement as they do in the workforce."

However, Social Justice Ireland (SJI) today branded the government’s proposed new framework as "deeply flawed" and claimed that it will effectively leave 47,000 older people in Ireland with no entitlement to a pension, a figure which is likely to increase in the years ahead.

Seán Healy, the director of SJI, said: "[The] government's failure to introduce a universal pension entitlement in Ireland means that many people will have no pension. This situation is totally unacceptable and could have been addressed effectively by introducing a universal pension entitlement.”

Sinn Féin’s spokesperson for social and family affairs, Aengus Ó Snodaigh, said the introduction of mandatory pensions would amount to a further pay cut for low-paid workers.

Socialist MEP Joe Higgins has also criticised the framework, calling on workers to "resist" the measures. Higgins said that "the push to force workers to continue working until they are nearly 70 is socially regressive, and reactionary in the extreme".

Reaction from Fine Gael has also been negative. Fine Gael’s social and family affairs spokeswoman, Olwyn Enright, described the new framework as a "massive gift to the pensions industry".

Enright said: "The Government is forcing private sector workers into defined-contribution schemes where the individual is expected to carry the entire risk of poor investment returns. This is a scary prospect, considering how badly investments have performed over the past year."

Addressing a conference in Dublin today, Fine Gael's enterprise spokesman Leo Varadkar called for a new type of social partnership offering universal health care, state-backed pensions and targeted welfare in return for public and private sector reforms.

Varadkar said: "Social partnership served us well in the late 1980s and early in 1990s, but lost its way during the Ahern era. The social partners merely carved up the gains from the Celtic Tiger among themselves...very little real social progress was made in terms of access to health care, child care, pensions, equality or welfare reform. This model did not survive the downturn. It never could." 

In response to Varadkar’s speech, Healy told Politico that SJI had been arguing for some time for the need for a new social partnership contract appropriate to the 21st century. 

Healy said it is critically important that whatever government is in power is focused on four key principles; the core philosophy that every man, woman and child should have what is required to live with dignity; economic, social and environmental sustainability; an equality and rights-based approached at the core of public policy and the development and sustainability of international competitiveness.

Healy said: "It is critically important that whatever government is in power is focused on these four outcomes, not merely in rhetoric, but in practical policy development and implementation."