Deputy Michael Noonan went on to say:
"A number of proposals have been made that
individuals should be allowed access to their pension savings prior to
retirement. Various rationales have been advanced to justify these proposals,
including that such access would allow those individuals to pay down mortgage
and other debt and would otherwise provide a boost to economic activity.
This is not a simple matter. During 2011, at the
request of the Government’s Economic Management Council (EMC), an ad-hoc group
was established under the chairmanship of the Department of Social Protection
to consider the idea of allowing people to access their pension savings before
pension age in order to assist them in paying down debt. The ad-hoc group
presented a detailed report to the EMC in September 2011. The conclusions of
the Aa-hoc Group report were that:
Ø There is no evidence that, in general, the group
likely to be most affected by mortgage debt (or other debt) has access to
sufficient pension savings to make a difference to their situation.
Ø The legislative and administrative implications
for such a scheme would be extremely complex and would appear excessive given
the overall impact.
Ø Longer term difficulties whereby people are not
making adequate provision for their retirement would be exacerbated, with
potential for increased demands on the State.
Ø Individuals cashing in their pension savings now
would get poor value in current circumstances which they would struggle to
replace in the future.
The “Keane Group” on mortgage arrears did not
dispute these findings and early access to pension savings did not feature
among the recommendations of that Group. A more general scheme of early access
to pension savings would present significant problems in terms of the proper
targeting of the use of accessed funds and controls over potential abuse.
The tax treatment of
pension savings for which I have responsibility is only one aspect of the broad
policy of encouraging people to provide for an adequate income in retirement
beyond the basic State pension. This policy area is the responsibility of my
colleague, Ms Joan Burton TD, Minister for Social Protection, who I know is
also aware of the proposals being made for early access to pension savings. The
OECD is currently carrying out an independent review of long term pension
policy in Ireland on behalf of the Minister for Social Protection. I have been
advised, in response to a request from me in this matter, that the terms of
reference of the independent review are such as to facilitate consideration of
the issue of early access to pension savings and I would expect that the OECD
review would deal with this issue".
