Retirement age:The pension board has recommended allowing people to draw a State pension at a later age in exchange for a larger pension at a later date, which would reduce growing pressure on the State system.
In the report the board says "it recognises that the cost of Social Welfare pensions will increase very significantly in the future and steps will be needed to ensure that these pensions can be maintained".
It looked at raising the annual Exchequer contribution into the National Pensions Reserve Fund, set up in 2000 to meet future social welfare and public service pensions. No recommendation was reached on this. Equally, the review made no firm recommendation on raising the age at which social welfare pensions are made.
The main argument in favour of increasing retirement age is financial, says the review. There is also an argument of "intergenerational equity" as life expectancy rises. Pension payment during long retirements "is not sustainable in the long-term without a proportionate increase in the period of time spent in the labour force", it argues. The main arguments against raising the State retirement age are:
A flexible retirement system would also allow those who wish to stay at work to accrue extra retirement benefits.
Pension cap
A cap should be placed on the percentage of income an individual can invest in a pension and receive the associated benefits, but only if this helps lower-paid people, the National Pensions Review advises.
The review supports capping pension contributions, but only "if the derived savings are used to improve incentives for the lower rate and non-taxpayers". The current system of granting tax relief at a contributor's marginal rate means that higher-rate taxpayers receive "proportionately more relief", according to the review.
It says higher earners are more likely to be members of supplementary pension arrangements than lower earners and then tend to contribute more, thus getting more relief.
The tax-free lump sum at retirement also benefits higher earners more, it notes. In addition, the tax reliefs on pension contributions granted each year does not reflect the true cost of those reliefs because the reliefs will generate additional tax revenue.