Pension Commission priorities and Ibec, the global voice of Irish business
The latest CEO Update to Ibec membership from Danny McCoy
Dear member,
The Government’s Pensions Commission is developing a range of options to address the sustainability of the State Pension and the Social Insurance Fund in terms of pension age, contribution rates and the impact of private sector employment contracts. Its recommendations will have significant economic and labour market implications for the future.
Following an extensive member survey and engagement process, Ibec has submitted its priorities to the Pensions Commission emphasising that an employer’s ability to fix mandatory retirement ages in employment contracts should be retained. Any proposal to remove this ability would undermine the legitimate autonomy of employers for workforce planning, including determining appropriate employee numbers and skill sets, recruitment and planning for departures.
Ibec’s priorities for the Commission include the following:
• Support for linking the State pension age with life expectancy but that any future increases in the pension age should be introduced within a fair, transparent and clearly understandable framework if they are to gain widespread acceptance.
• Request for an immediate assessment by Government of life expectancy to include a review of the proportionality between time spent in working life and retirement.
• Acknowledgement that Government and business must work together to address the fiscal sustainability implications of an aging workforce, without jeopardising the needs of business for certainty, talent attraction, retention and succession planning.
• Provision of as much legal support as possible by Government to recognising the alignment of contractual retirement ages with the State pension age as a legitimate employment policy and labour market aim, in-line with European equality legislation.
• The setting of a default retirement age at the level of the State pension age could be explored.
In relation to Pay Related Social Insurance (PRSI) rates and the Social Insurance Fund aspects of the consultation, Ibec has made the following key points:
• That balancing the increased costs of an ageing population, should be part of a holistic review of the tax and social insurance system under the forthcoming Commission on Taxation and Welfare.
• The significant risk posed by elements of pensions and social insurance policy being considered in an ad-hoc manner and independent of one another e.g. new policies such as expansion of working age benefits and occupational pension auto-enrolment.
A full copy of the Ibec submission can be viewed attached below.
In ensuring that St Patrick’s Week provides a channel for Ibec to position Irish business and influence global networks and stakeholders with impact, I engaged in a number of key EU and US meetings this week aligned with the Government’s outreach programme. These included hosting Commissioner Mairead McGuinness, EU Head of Task Force Michel Barnier and MEP Sean Kelly for a virtual discussion on the future of the EU. I also joined An Taoiseach Michael Martin and US business leaders at a private roundtable hosted by the US Chamber of Commerce.
Today, colleagues and I will engage with Dan Mullaney at the US Trade Representative and next Monday, Ibec will host a virtual event on Transatlantic Technology and Trade Policy with DC based technology trade association ITI for which you can register here.
As the formation of the Biden Administration begins to take shape and nominations pass through the voting process, we will bring more opportunities for members to engage on key transatlantic issues in the weeks ahead. Throughout these engagements, Ibec’s message remains clear: at a challenging juncture when protectionist rhetoric intensifies and the global economy endures continued Covid-induced disruption, the recovery will be fuelled by supporting multilateral trade, open economies and continued ease of access to global markets.
Best wishes,
Danny McCoy
CEO
Ibec
