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Employees cannot afford second pension fund: Ó Snodaigh

30 December, 2012 - by Aengus Ó Snodaigh TD

In response to statements by social protection minister, Joan Burton TD, on pension reform, reported in the Sunday Business Post, Sinn Féin’s Aengus Ó Snodaigh TD, said: "There is nothing new in the proposals, which were previously announced by other social protection ministers. There is still a lack of detail.”

The Sinn Féin social protection spokesperson continued: “The priority for the state pension system is to ensure that it is sustainable and affordable for the state and that it keeps pensioners out of poverty in the future.

“At present the social fund is in dire straits due to the fall off in contributions as more and more people become unemployed. As well as ensuring people get back to work, the state should stop subsidising private pensions by, firstly, standardising the tax relief from private pension to 20% and ultimately eliminating it.

“This tax relief is, in fact, tax lost to the state, but if it reverted to the social fund would help address the hole in the finances.

“Focus should also be put on the fact that the vast majority of Irish monies in pension funds are invested abroad and therefore are a loss to the Irish economy.

“While I welcome the fact the minister is considering getting the NTMA to manage a future second pension, rather than the inefficient private pension industry, the vast majority of people can barely afford their existing pension contributions and so, I can see most employees opting out of the new state second pension.

“Taxpayers will also suspicious of government promises in relation to this new compulsory/auto-enrolled pension given that they have seen this government interfering with the commitments and guarantees of the current PRSI system, by, for instance, changing their entitlement to Job Seekers Benefit in the most recent budget, from 12 months to 9 months and the introduction of tax on maternity benefit.

“They have also seen the minister target the core child benefit rate with a disproportionate cut of €10 for each child and an additional €8 for the third child. It now seems that this minister wants to target children once more.

“So much for the coalition parties’ commitment in their recent Children's Rights Referendum campaign to protect and enhance the rights of children.

“Child Benefit is a universal payment and should be retained as such. If families have additional of surplus income or wealth it should be targeted for tax through a wealth tax and a third rate of tax at 48% on that portion of income over €100,000.”


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