Foreword to the National Pensions Framework

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Details of Changes to State Pension (Contributory)


This framework sets out the Government's intentions for radical and wide-scale reform of the Irish pension system. It sets out a fair and equitable approach that encompasses all elements necessary for future pension provision. The State will continue to provide the bedrock for the pension system with the State Pension, while employers and individuals will be encouraged to share the responsibility with Government to save and provide for the future.

Developing this framework has not been an easy task. We started on this reform with the publication of the Green Paper on Pensions and we have been greatly assisted and heartened by the many views of those who contributed to the consultation process.

We will continue to consult with all interested parties on the detailed reform arrangements as they are being developed and we welcome and look forward to your continued interest and support.

We know that this long-term framework will pose challenges for us all and implementing such radical reforms will require significant commitment from Government, the pensions industry, employers and individuals. By working together, we can overcome these challenges and ensure that future generations can look forward to a more equitable, sustainable and comfortable pension in retirement.

This Government has always supported pensioners and the substantial increases in the State Pension and other supports in recent years have led to major improvements in their standard of living. But, like other countries, we are facing a number of significant challenges as a society due to the fact that we have an ageing society and a reducing workforce. We must plan now to ensure the adequacy of retirement incomes and the long-term future and sustainability of our pension system.

We embarked on this project to develop a robust strategic response to these emerging challenges. Since then, the much changed economic circumstances and the turmoil in global financial markets over the last year have placed question marks over the capacity of the current pension model to accumulate the required amount of income to serve future pension needs. It is clear that the pension model we pursue must be comprehensive, sustainable and capable of delivering the economic returns required to meet future liabilities as they arise. This task has not been made easier by the recent experience in world financial markets.

This means that we must keep the pensions issue constantly on the agenda and be prepared to accelerate some elements and amend others if necessity dictates. Nevertheless, the basic elements of pension reform presented here will remain – the need to enrol many more savers, the need to promote a fairer system and the need to align pension age and benefits to the unavoidable demographic conditions we will face.

The inescapable fact is that for every pensioner we have now there are around six people at work to support them; by 2060 that figure will be less than two. The sooner we face this inevitability, the better prepared we will be to meet it.

This Government is keenly aware of the current economic environment and the potential impact of some of the proposals on competitiveness, if implemented now. We will ensure that changes are introduced only when we are confident that the time is right. However, we strongly believe that our strategic and long-term policies must be conveyed to all, to provide a clear statement of our intent and direction for the future.

Brian Cowen-Taoiseach

Brian Lenihan – Minister for Finance

Mary Hanafin-Minister for Social and Family Affairs

March 2010

Last modified:02/07/2012

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