A major reform of future State, private and public service pension provision was announced by the Taoiseach, Minister for Finance and Minister for Social and Family Affairs this afternoon in Government buildings.

New Pension System

The key elements of the new National Pensions Framework are:

•           The State pension will be reformed and will remain as the fundamental basis of the pension system in Ireland. Every effort will be made by the State to keep the value of this pension at 35 per cent of average earnings;

•           A new supplementary pension scheme will be introduced to provide additional retirement income for employees who are not already in a pension scheme. Employees earning above a certain income threshold will be automatically enrolled in this new scheme, and the State and employer will support this by providing matching contributions;

•           There will be matching State and employer contributions. The State contribution will equal 33 per cent tax relief – the delivery mechanism for this to be decided;

•           The same matching State contribution (and delivery mechanism once decided) will apply to existing occupational and personal pension schemes and will replace the current system of tax relief at the standard and higher rates;

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