The number of Irish workers taking out pensions or PRSAs increased substantially last year, indicating they may finally be heeding campaigns urging them to provide financially for retirement.
In its annual report for 2006 published today, the Pensions Board said total membership of pension schemes last year was 797,370, up 8.5 per cent on the previous year.
Pensions Board chief executive Brendan Kennedy
And there were some 95,045 Personal Retirement Savings Accounts (PRSAs) in existence at the end of last year, compared to 68,257 at the end of 2005 - a rise of 39 per cent.
However, the board said the adequacy of contributions to so-called defined contribution pensions "continues to be a concern".
It also expressed concern about heavy investment in equities by pension funds.
Many companies who have traditionally provided pension schemes for their employees are moving away from the defined benefit model, which means workers get a guaranteed portion of their salary on retirement. This model has become very expensive for companies to fund. Instead, many are now insisting that new employees take defined contribution pensions, which mean the worker's pension is totally dependent on the value of their 'fund' when they retire.
Funds that are heavily invested in equities are vulnerable to market fluctuation and there are concerns that many defined benefit schemes will not have sufficient funds to provide the cover they need for their members.
Pensions Board chief executive Brendan Kennedy, said the board supervises about €90 billion in pension and PRSA money throughout the State and he was glad to see an overall improvement in levels of compliance by companies with pension rules.
"The main policy achievements during the year included the publication of the National Pensions Review (NPR), the Special Savings for Retirement report as well as our role as technical adviser to the Green Paper on pensions," he said.
"The board, through its National Pensions Awareness Campaign and its general information services, has made significant progress in raising the levels of public awareness of pensions and pension adequacy.
However, the Board cannot solve the issues of pensions take-up and adequacy on its own, and everyone concerned with pensions must focus on this problem."
Minister for Social and Family Affairs Martin Cullen was formally presented with the report at an event in Dublin. He said pensions policy had taken centre stage as one of the major issues facing the country in the years and decades ahead and was one of his own key priorities.
"There is a commitment from Government in [social partnership agreement] Towards 2016to publishing a Green Paper on pensions, having a consultation process and developing a framework to address the pensions agenda over the long term. I am anxious to make progress in this area as quickly as possiblem," he said.
"I am aware that my Department has finalised a draft of the Green Paper in cooperation with the Departments of An Taoiseach, Finance and Enterprise, Trade and Employment and that it has been submitted to Government. I wish to take time over the summer to examine this paper carefully, with a view to publication in September."
Mr Cullen said it was vital that the board use its powers to the fullest extent possible to ensure that trustees, pension scheme administrators and employers fully comply with the provisions of the Pensions Act
Its annual report reveals that in 2006, the Pensions Board took nine prosecutions, all of which were successful.
Mr Cullen said he was particularly pleased that a number of these prosecutions arose as a result of the activities of social welfare investigators who are supporting the Pensions Board in policing employer PRSA obligations.
Established by the Government under the Pensions Act, 1990, the Pensions Board aims to monitor and safeguard the interests of almost 900,000 people who are members of occupational pension schemes or who have personal retirement savings accounts.