The Government has made no decision on the future of the SSIA saving scheme, Minister for Finance Brian Cowen told the Dáil.
The Government was monitoring the situation, he said. "I do not wish to indicate at this remove what, if any, response there will be from Government.
It is better to monitor the situation. Obviously, I am examining the issue, but it is not an issue on which the Government has come to a firm view." Mr Cowen was replying to Labour finance spokeswoman Joan Burton, who said that the SSIAs posed the risk of a considerable increase in consumer spending which could have an inflationary impact.
"Is there not, therefore, a great opportunity to examine pump-priming pension cover, particularly for the lower paid who took the opportunity to participate in the savings scheme?" Earlier, Fine Gael finance spokesman Richard Bruton accused the Minister of having a "sanguine view" on tax relief for pension contributions.
"More than half of workers do not have pension cover and these are predominantly low-income earners. Does the Minister agree that there is a real difficulty with the distribution of pension benefits?"
Mr Bruton said that at the top end, people had unlimited opportunities if an employer was contributing to a pension for a director. On the other hand, he added, many ordinary workers had no pension cover.
"Does the Minister not agree that there is a need for action to address this huge gap both in terms of equity and lack of pension cover?"
Mr Cowen said tax relief for pension contributions was not unlimited. "Relief on contributions to personal pensions and PRSAs is limited to a certain percentage of remuneration which rises with age, 15 per cent to 30 per cent for age 50 years and above. The employer contribution to PRSAs is aggregated with the employee contribution for the purposes of tax relief limits."
Pension coverage was an issue which must be kept under review, Mr Cowen added.
"The policy response must meet the challenge that confronts us. The CSO [ Central Statistics Office] survey on pension coverage reveals that the coverage rate for persons in employment in the first quarter of 2004 was 52.4 per cent.
"It has indicated it will complete its full survey of pension coverage towards the end of this year and it expects it to be published in the first half of 2006."
