Brennan considering mandatory pensions

[tiger]

From RTE:
http://www.rte.ie/news/2005/0922/pensions.html

I don't think Séamus has thought this through fully. While something does need to be done about pensions, mandatory pensions = tax increase. Will public sector workers have to pay the same tax?

As a result of benchmarking it now appears public sector workers earn more than their private sector counterparts (was somewhere in the irish media in the last week, but can't find a reference now). Does this even include their pension benefits?

 

[ashambles]

I think the public sector now make some contribution (5%?) to their pension so they probably wouldn't need any change. (The recent salary comparison didn't include pensions).

My main doubt with what may be proposed is that it would make it easier for the state pension, which at the moment is just about ok, to be reduced in real terms. This would mean people who're already saving what they hope is enough, will need to try to put away even more.

What happens to someone on a very low salary paying little or no tax. Do they need to send 5% to a pension company even if they didn't want to or can't afford to.

Pensions are fine but without a tax advantage, who'd bother, doubt that anyone exceeds the % contribution offsettable to tax. Which isn't too different from what this proposal could be asking the low paid to do (unless they refund tax at the higher rate to everybody).

The pension companies will be rubbing their hands with glee if this goes through, since with charges they'd earn around 2% of 5% of the entire national pay, wonder how many of their people are on the group making recommendations to the minister.