Minister Humphreys announces the establishment of the Pensions Commission

The Minister for Social Protection, Heather Humphreys TD, has today secured Government approval to establish the Commission on Pensions.

The Commission, which will be chaired by Ms Josephine Feehily, will examine sustainability and eligibility issues in respect of State Pension arrangements and will outline options for Government to address issues such as qualifying age, contribution rates, total contributions and eligibility requirements.

The membership of the Commission reflects the wide range of expertise and stakeholder representation necessary to examine the complex public and social policy issues involved.

This includes representation of workers, employers, civil society, academics and those with technical and policy expertise.

Following today’s Cabinet meeting, Minister Humphreys said:

The Commission will engage with a range of key stakeholders to ensure that it has a genuine understanding of not only the fiscal sustainability challenges involved, but the social sustainability challenges of implementing potential policy reforms.

The exact mechanisms for this engagement will be shaped by the Chair and by Commission members.

In announcing Ms. Josephine Feehily as the Chair of the Commission, the Minister said:

Ms. Josephine Feehily, Chair of the Commission on Pensions said:

The Commission will submit a report on its work, findings, options and recommendations to the Minister by 30 June 2021.

ENDS

Terms of Reference for the Pensions Commission

As set out in the Programme for Government, the terms of reference for the Commission on Pensions are to –

Towards this end, and also taking account of issues of cross-generational equity, the Commission is asked to –

1. Review the current State Pension arrangements in terms of scheme types (the State contributory and the State non-contributory pensions), eligibility criteria, and trends in numbers qualifying, levels of expenditure, and levels of social insurance contributions, taking account, where relevant, of socio-demographic characteristics (for example, gender);

2. Review the projected changes in demographics, earnings and the labour market, and associated costs – examining information, data and analysis from various sources including the CSO, IFAC, Department of Finance studies, the Department of Public Expenditure and Reform, the Department of Social Protection, the Actuarial Review of the Social Insurance Fund, the EU and the OECD;

3. Review previous analyses of the State Pension arrangements and recommendations for changes including those set out in the National Pensions Framework 2010, the OECD Review of Pensions in Ireland 2013 and the Roadmap for Pensions Reform 2018;

4. Review the situation in other countries, the changes they have planned or legislated for and the approaches taken;

5. Seek views of recognised experts and representative/advocacy groups by inviting submissions and/or presentations;

6. Examine how private sector employment contracts specifying retirement ages below the State Pension Age may be impacting on the State’s finances and pension system;

7. Consider how people who have provided long-term care for incapacitated dependents can be accommodated within the State pension system;

8. Develop a range of options for the government to consider in order to address the sustainability of the state pension and the Social Insurance Fund in terms of pension age, eligibility criteria, contribution rates, pension calculation methods and pension payment rates; and

9. Submit a report on its work, findings, options and recommendations to the Minister by 30 June 2021.

Membership of the Pensions Commission

As appointed by the Minister for Social Protection:

1. Josephine Feehily (Chair) – formerly Chair of the Office of the Revenue Commissioners and formerly Chair of the Policing Authority of Ireland

2. Ita Mangan, Barrister, Chair of the Citizens Information Board, Chair of the Board of Age & Opportunity, Member of the Board of the Irish Hospice Foundation and formerly Chair of the Advisory Group on Tax and Social Welfare

3. Roma Burke, Actuary and Partner with Lane, Clark & Peacock, member of the Pensions Council, member of the Society of Actuaries of Ireland and former Chair of its Pensions Committee, independent non-executive director of Dublin Simon Community

4. Seamus Coffey, Economist, Lecturer in UCC, member of the external advisory board to the Irish Government Economic and Evaluation Service and former chair of the Irish Fiscal Advisory Council

5. Dr. Aedín Doris, Labour Economist, Lecturer in Maynooth University and Managing Editor of the Economic and Social Review

6. Jack Keyes, Principal Advisor for Age Friendly Ireland (Housing and Public Realm), Chair of Pyrite Remediation Board and outgoing Chair Readers Advisory Committee National Library of Ireland, former County Manager, Senior Advisor in policy formulation and implementation.

7. Ian Power, CEO of SpunOut.ie, member of the Board of the Citizens Information Board (CIB), member of the Board of Community Foundation for Ireland, and formerly President of the National Youth Council of Ireland

8. Anne Vaughan, former Deputy Secretary General of the Department of Social Protection, former member of the Pensions Authority, and current Chair of the National Statistics Board

9. John McGrane, Director General of the British Irish Chamber of Commerce, Executive Director of the Family Business Network, Founder of NSI Technology, Former Board Member/Director of Dublin City Enterprise Board

10. A representative to be nominated by ICTU

11. A representative to be nominated by IBEC

Sustainability Challenges

The deferral of the increase in the State Pension age will cost €221 million in 2021 and €453 million in a full year.

Some €8.8 billion has been allocated to the department for pension payments in 2021. This represents an increase from 29% of the social welfare budget in 2011 to 38% in 2021.

The cost of paying the State Pension is increasing by €1 billion every 4 to 5 years, for demographic reasons alone.