'People in previous years have been condemned to poverty in their old age' - Sligo/Leitrim Senator

Sligo/Leitrim Senator Nessa Cosgrove, called this week for the upcoming introduction of pension auto-enrolment to be extended to younger workers, and for ethical investment to be promoted through the scheme.

Speaking in Seanad Eireann during a debate on auto-enrolment, Senator Cosgrove stated: “As we all know, the best time to start a pension is as early on in one’s career as possible. However, the reality for most people is, that as low-paid workers, particularly at the beginning of your working life, that there is no spare capacity in the weekly or monthly budget to pay for pensions.  I know that personally, as a low-paid youth worker, it was only in the last few years that I was able to afford to contribute to a pension."

She continued: "The lack of affordability has led to low rates of pension uptake amongst younger workers, and those who remain on low wages throughout their working lives. 811,000 worker’s currently have no occupational, or private pension provision, meaning that many people in previous years have been condemned to poverty in their old age.  The voluntary nature of pension provision in the past has failed low-paid workers, and the Labour Party has been supportive of the introduction of an auto-enrolment pension scheme for many years.  Having a large State fund gives additional security and investment potential to a pension scheme, and I would like to see these benefits extended to younger workers, aged 16-23 who are currently excluded from the scheme, as even small amounts contributed during these early years would have a disproportionately beneficial impact upon the pension amount available at the end of a working life.  If 16-year-olds are old enough to make PRSI contributions, they are old enough to be entitled to the benefits of auto-enrolment.”

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Senator Cosgrove went on to outline some of the potential benefits that a large scheme could hold for, not just, policy holders but also for the wider investment sector:

“Having a large State fund, which is managed according to strict ethical guidelines, could also have a beneficial impact upon the ethical approach taken towards pension funds across the whole market. This is an opportunity for us to say that we do not want our collective retirements built upon the profits of dubious and immoral investments from companies who profit from fossil-fuel exploitation, war, pornography and those who benefit from child or slave labour.”

While the Labour Party spokesperson welcomed the introduction of the scheme, she cautioned against "the downgrading of the State pension, the temptation to expand bogus self-employment amongst some employers and the undermining of existing pension schemes."